Exhibitors Herald World (Oct-Dec 1929)

October 5, 1929 EXHIBITORS HERALD-WORLD 19 Trade Wins Federal Court OK For Credit Committee System Rules to Save Contracts from Fraudulent Sales Found Legal Judge Warns Against Attempting to Extend Anti-Trust Laws Beyond Their Natural Scope By PETER VISCHER NEW YORK, Oct. 1. — The film industry scored a notable victory in its defense of the suits brought by the Government under the Sherman Anti-Trust Law here when Federal Judge T. J. Thatcher dismissed one of the two complaints pending. The victory brought considerable rejoicing and raised hopes that the industry's victory over the Government will be complete. To explain the matter briefly, it ought to be pointed out that the Government brought two suits against the industry. The first is known as the "First National Suit" and constituted an attack on the rules of the Credit Committees of the Film Boards of Trade. The second is known, simply as a matter of convenience to differentiate it against the other, as the "Paramount Suit" and is an attack on the standard contract and the arbitration system. Germans Opposed to Barring of American Audiens: Thomson (Special to the Herald-World) NEW YORK, Oct. 1. — P. L. Thomson, public relations director of Western Electric, and M. Arthur Dent, of British International Pictures, gave interesting sidelights on the progress of sound pictures abroad in addressing the meeting of the Associated Motion Picture Advertisers at the Hotel Paramount, New York, on Thursday, September 26. Thomson opened his remarks with comments on the International Advertising Conference at Berlin at which he was a delegate. He stated that German color and poster work was very fine but that in typography and advertising the Germans had a lot to learn and they looked to their American friends for helpful suggestions. Enthusiastic Over Progress He expressed enthusiasm over the progress of sound pictures in various European countries and declared that they should prove a potent vehicle for carrying the English language to the ends of the earth and make it the universal tongue of the world. According to Thomson the closing out of American sound pictures in Germany was extremely unpopular with the people. He stated that sound production was progressing very well in England and that France was just getting started. It was his belief that England would be able to compete with us in the making of audible pictures. Dent Doubts Universality Dent, expressing the views of a British producer, agreed with Thomson in that the English language would be advanced through the medium of sound films but he did not agree that it would have the ultimate effect as mentioned by Thomson. In fact he decried hopes that such a thingwould take place in the thought that it was not in the world's interest that it be Anglicized. Herrin Council Votes Sunday Shows; Fixes Annual License Fee (Special to the Herald-World) HERRIN, ILL., Oct. 1.— The city council of Herrin has adopted an ordinance which will permit the operation of theatres on Sunday. The ordinance carried by a 5 to 3 vote and the first Sunday show will be held at the Hippodrome October 6. The ordinance legalizes the presenting of shows each day of the year, the licenses expiring on the last day of the city's fiscal year. The council established a license fee which is based on seating capacity. Theatres seating 500 persons or less $75, those seating over 500 and under 1,000 $200, over 1,000 and under 1,500 $300, 1,500 and over $450. The figures are for annual license. Fire Closes Rialto (Special to the Herald-World) CHARLOTTE, Oct. 1.— The Rialto theatre at Greer, S. C, is closed on account of a fire which damaged the projection room and front of the building last Thursday night. The house is operated by C. A. Herlong. Both suits are against the leading motion picture producers and against 32 boards of trade, charging that they were operating in violation of the Sherman Anti-Trust Law. If successful in either suit, the government would have forced far-reaching changes in the motion picture industry. Credit Rules Held Legal The suit dismissed by Judge Thatcher was the socalled "First National Suit." He ruled that the credit committees and their rules, formulated by distributors to protect contracts against the fraudulent sale or transfer of theatres are legal. The system upheld is that adopted by the industry several years ago to govern the sale of motion picture houses whose owners were under contract to buy pictures at the time of the sale. The seller cannot be forced to complete his contract, and the buyer is under no obligation to assume it. Since 4,000 or more of the 20,000 motion picture theatres in the country change hands every year, the loss due to uncompleted contracts was considerable. It was estimated at $4,000,000 annually by the defense. So the distributors agreed to demand security not exceeding $1,000 as a condition of entering into a new contract with the purchaser of the theatre, in case their Credit Committee decided that the transfer was made by the previous owner to avoid completing his contract, or in case the new Give Benefit Show For Idle Theatre Employes (Special to the Herald-World) CINCINNATI, Oct. l.—The Stage and Screen Scribes of America, Inc., an organization composed of local exhibitors, theatre managers, dramatic and photoplay editors and allied professions, will not hold a midnight frolic this year. Instead, they will give a benefit performance, with some of the very best theatrical talent available, the proceeds to be turned over to theatre employes who have been idle because of legitimate houses being dark, due to strike of stagehands. owner refuses to furnish credit information. This system, which the film industry hailed as a solution to the problem, was asserted to be a violation of the Sherman Anti-Trust Act by United States Attorney Turtle when the case was tried last March. The defense was represented by Edwin P. Grosvenor of the firm of Cadwalader, Wickersham & Taft, No. 76 William street. The defendants distribute 60 per cent of all the films made in the United States. It was pointed out by Grosvenor that the agreement did not concern prices and that the defendants were at all times in active competition with each other throughout the country. "In this case all the badges of unreasonable restraint are lacking," Judge Thacher said in his decision. "There is no suppression of competition, ho'r any attempt to monopolize. No one has complained except the government. No injury to individual traders or to the public is disclosed. Says Both Have Benefited "On the contrary, serious abuses have been eliminated, and both exhibitors and distributors have been benefited. "The most serious complaint is that deposits in small amounts have been required from bonafide purchasers of motion picture theatres for security in performing new contracts in case the new owner wishes to make new contracts without assuming the old, and this requirement has been used to induce the new owner to assume and car^ out the uncompleted contracts of the former owner. "The defendants' agreement to demand security was fully justified by their common interest in preserving the integrity of contractual obligations owing to them." Warns of Over-Restriction After pointing out that the distributors were doubly justified by the fact that many small motion picture owners are financially irresponsible, the court closed with a warning against trying to extend the anti-trust laws beyond their natural scope, pointing out that "to extend a statute ... in a situation so equivocal and so lacking in substance would be to cast doubt upon the serious purpose with which it was framed" — a quotation from a recent decision of the United States supreme court.