Although the rationalization of the theatre may have increased business for the front office, the working conditions for actors did not improve. Managers and producers were less likely to be actors who understood the daily working of the theatre. These businessmen made demands including unlimited rehearsal time with no pay, half pay during holiday weeks, a two week clause that allowed firing of actors with almost total discretion, actors paying for their transportation to performance locations, and often paying for their own costumes. These conditions helped to rally the actors to fight together. Many attempts were made, but it was not until May 26, 1913 that a functional group was formed--the Actors' Equity Assocation.

Because of a clause in the American Federation of Labor, however, Equity was not fully recognized until 1919. Shortly after it was recognized, the organization was able to stage a strike which "lasted for thirty days, spread to eight cities, resulted in the closing of thirty-seven plays, prevented the opening of sixteen others and cost all concerned in the neighborhood of three million dollars," as historian Alfred Bernheim stated. The result was a complete victory for the Actors' Equity. The actors had learned that the best way to bet a corporation was to become one yourself.