Why was Columbia Pictures considered a Poverty Row studio when Frank Capra joined it?

When Frank Capra joined Columbia Pictures in 1928, the studio was considered a "Poverty Row" operation because it lacked the resources and prestige of major studios like Metro-Goldwyn-Mayer, Paramount, and Warner Brothers.1

Specifically, Columbia suffered from a lack of financial wherewithal and did not have access to the roster of big-name contract actors that defined the major studios of the era. Consequently, during Capra's first year, he was tasked with directing silent features primarily on low "B-film" budgets. It was only through the subsequent success of films like It Happened One Night (1934) that the studio began to rise to a position of equality with the other major Hollywood players.12