"There's only room for one Jew movie a year," Goldwyn warned.
Lardner eagerly researched the subject and wrote a fiery denunciation of American prejudice, only to have the script thrown back into his face.
"I hired you because I wanted a goy to write the story," Goldwyn told Lardner. "You have betrayed me. You wrote it like a Jew."
Many years later, Lardner recounted the incident to a playwriting class at New York University and sparked an idea in Daniel Goldfarb, a young Canadian-born student.
The result is Goldfarb's play "Adam Baum and the Jew Movie," written when he was 23, and which premiered as an off-Broadway production in 1999.
After numerous revisions, the play has finally made its way to Los Angeles, its native habitat, guided by veteran movie director Paul Mazursky.
In the three-character play, the central figure is Sam Baum (Richard Kind), an amalgam of three legendary moguls: Louis B. Mayer, the boss and greatest ham actor on the MGM lot; Harry Cohn, the foul-mouthed Columbia Pictures chief; and Goldwyn, the master of malapropisms.
Sam lavishes his affections on his son Adam (Gregory Mikurak), who is about to celebrate his bar mitzvah with the most ostentatious party money can buy.
Rounding out the cast is Garfield Hampson, Jr., the Ring Lardner character, portrayed by an actor with the wonderful name of Hamish Linklater. Hamish (or haimish) may be "homey" for Yiddish speakers, but for the actor's tribe it is Scottish Gaelic for "James."
Sam set the Hollywood ambiance at the opening. To Gar (for Garfield): "I hired you because you're the best goyish writer in Hollywood." Gar: "I am the ONLY goyish writer in Hollywood."
In the first act, which moves rather slowly, Sam establishes himself as one of the archetypical Jewish immigrant go-getters, the wanna-be American super patriots and insecure Jews who invented Hollywood and through it the image of an ideal, Anglo-Saxon America.
When Gar suggests that the main character in Sam's movie, to be titled "Soil and Utopia," be played by a Jewish character, Sam is horrified.
"You can't have a Jew playing a Jew," says Sam and, borrowing a famous Harry Cohn line, adds, "In my movies, all Jews play Indians."
Gar cuts a rather pale figure in contrast to the blustering, bullying Sam. The writer is a well-mannered WASP, an Ivy League alumnus, but also a left-wing "premature anti-fascist," who is aghast at Sam's demand that he make the film's anti-Semites "a bit nicer ... you gotta make clear that Americans are good."
Sam invites Gar to his son's bar mitzvah party, "to learn something about real Jews," and, in the powerful second act, the celebration turns into a battlefield between producer and writer, repressed Jew and uncomprehending non-Jew, and between smothering father and conflicted son.
Always in the background lurks the threat of "Gentleman's Agreement," produced by Darryl Zanuck, the only non-Jewish studio chief, and starring Gregory Peck as a WASP who pretends to be a Jew.
The screenwriter was Moss Hart, and Sam despairs at the cleverness of the competition.
"Only a Jew could write a Jew and not make him a Jew," Sam laments.
The play's denouement carries an emotional wallop that will linger for a long time.
Mazursky, director and writer of such film classics as "Harry and Tonto," "An Unmarried Woman" and "Enemies, a Love Story," said that the character of Sam reminded him of quite a few American Jews.
"They're hiding from themselves and their Jewishness, but in the end they're still Jews," Mazursky said.
Goldfarb, speaking from his home in New York, said he would pursue the question of Jewish identity in his next play. It will be based on a true incident, in which a group of Holocaust survivors tried to exact revenge by poisoning the water supply in a camp holding Nazi veterans.
"Adam Baum" continues through July 20 at the Hayworth Theatre, 2509 Wilshire Blvd., near MacArthur Park. Performances are Fridays and Saturdays at 8 p.m. and Sundays at 7 p.m. No shows July 4-7. For reservations, call (323) 960-4442.