The formation of Projection Aktien Gesellshaft Union (PAGU) in Frankfurt was a direct result of the previous venture of its’ four founder members, the exhibition chain Allgemeine Kinematographen-Theater Gesellschaft, Union-Theater fur Lebende und Tonbilder GmbH (AKTG), which was founded just four years earlier in 1906.

The four partners in AKTG were Paul Davidson, Hermann Wronker, Julius Wiesbader and Max Bauer. The new company opened its’ first cinema – called Union Theatre – in June 1906 in Mannheim, and a month later opened their second at 17 Grosse Gallusstrasse in Frankfurt am Main. In August they opened a third cinema in the Hohestrasse 23-25 in Cologne. Further cinemas rapidly followed, located on prime sites in Elberfeld, Ludwigshafen, and Düsseldorf. In fact, the company expanded so rapidly that, in February 1907, it opened its first cinema abroad in Brussels, Belgium. The company’s successful strategy was one of ‘affordable luxury,’ building luxuriously decorated palaces to attract a higher class of clientele while maintaining prices at a level that was affordable to the less privileged. From 1908 to 1910 this strategy paid off to the tune of 100,000 marks profit each year.

Following this period of consolidation, it became clear to the founders that continued expansion of the AKTG could not be financed entirely in its existing status as a limited company, and so the decision was taken to establish the projection joint-stock company ‘Union’ (PAGU). A contract setting up the organisation was signed by the four partners on 12^th March 1910, when it was entered in the Frankfurt register of companies.

PAGU’s activities did not just expand on the equipping and management of cinemas, but expanded into the manufacture and sale of films and film apparatus. An early example of vertical integration, the organisation became the first of its kind to be quoted on the German stock exchange. At its inception, the company had capital of 500,000 marks made up of 500 shares of 1,000 marks each.

In addition to Paul Davidson, Hermann Wronker, Julius Wiesbader and Max Bauer, Heinrich Hellwig, a manufacturer from Mannheim was identified as a co-founder of the new company. PAGU’s first board of directors included Albert Schlöndorf, an industrialist from Düsseldorf and Mannheim city councillor Max Jeselsen.

The AKTG existed independently of PAGU for a short while before eventually being liquidated in 1911 and winding itself up in May 1912. The following month PAGU moved ‘its new, greatly expanded commercial enterprise’ to 64 Kaiserstrasse. The PAGU concentrated its initial efforts in the exhibition sector, opening five cinemas in Berlin in 1910. Attendance at its cinemas increased from 2.5 million visitors in 1910 to 6 million in 1912.

Source:A Second Life: German Cinema's First Decades. Contributors: Thomas Elsaesser - editor, Michael Wedel - editor. Publisher: Amsterdam University Press. Place of Publication: Amsterdam. Publication Year: 1996. Page Number: 81