Edwin Thanhouser's stage management experience helped create pictures which that were immediately recognized for their story content, photography and artistic quality. The city of New Rochelle was enthusiastic about its most famous resident, and the New Rochelle Fire Department established a policy that as soon as an alarm was registered, a call would be made to the Thanhouser studio, so that a film crew could be on the scene! Similarly, the courtroom in New Rochelle was made available to the Thanhouser people, and numerous dramas were shot there in days in which the court was not in session. The main commercial district of New Rochelle furnished the backdrop for countless pictures, as did the residential areas.
On January 13, 1913, the studio building burned to the ground. Fortunately, the valuable negatives were saved, and no one was injured. This event became the scenario for one of Thanhouser's most notable productions,When the Studio Burned. Before long, premises on Main Street were secured and by 1916 a large complex had been created in its place. Behind the Thanhouser studios, fronting on Long Island Sound, was "Thanhouser Park," three acres in size, with fountains, bridges, and scenery, used for filming the 1914 serial, The Million Dollar Mystery.
In March 1912, nearly a year before the studio fire, Edwin Thanhouser sold his interest to the Mutual Film Corporation, a large enterprise comprising several other producing companies, and financed out of Chicago. Charles J. Hite, a Chicago film distributor, came to New Rochelle and assumed management, while Edwin Thanhouser and his family departed on extended "grand tour" of Europe. By 1914, two significant events occurred which would bring Edwin Thanhouser back to the company. World War I broke out in Austria, forcing the vacationing Thanhouser's to flee back to the United States. Toward the end of the same month, Charles J. Hite, returning from New York City, plunged through a bridge over a viaduct in Manhattan, and was crushed beneath his car. Hite's death left the studio in limbo, with a number of actors departing, and a decline in the quality of its films. The Mutual Film Corporation realized that Edwin Thanhouser would be the logical person to resume management of the existing company which still bore his name, the Thanhouser Film Corporation. He was hired back and, as before, Thanhouser subjects received many favorable reviews for their acting quality and dramatic content.
In 1917 the film industry underwent a significant downturn. Studios cut their payrolls, fewer films were produced and a number of theatres were shut down. Despite the industry-wide depression, Thanhouser remained in excellent financial condition with a six-figure balance in the bank. Gradually the Thanhouser Film Corporation phased out its activities, and by the end of the summer of 1917, the studio had been leased to another company, the Clara Kimball Young Film Corporation. It left a rich legacy, amounting to over 1,000 different films.
Several children achieved worldwide recognition with Thanhouser. At the top of the list was Marie Eline, who at the age of eight was a true movie star. She was the first player to earn a nickname, "The Thanhouser Kid.". Shortly there after, Helen Badgley, barely six years old, was designated the "Thanhouser Kidlet" and was seen in many sentimental roles. Finally, there was Shep, "The Thanhouser Collie", whose specialty was rescuing people from a wide assortment of disasters.