Harrison's Reports (1929)

204 HARRISON’S REPORTS December 21, 1929 When William Fox closed a deal for the purchase of the 430,000 shares of Locw stock from the Loew family and from Nick Schenck, at $120 a share, he needed some cash. Halsey, Stuart &Co. lent him $12,000,000 in cash, which was paid for the stock as a down payment. For the balance, notes were given. Halsey, Sturart & Co., which is a reliable concern, sold short term notes to its customers for the $12,0(X),000. These mature, as I have heard, around April 1, at which time they will probably have to be met. But how? Will the Fo.x Corporation be able to meet them? It is stated that Fox owes Western Electric, a subsidiary of American Telegraph and Telephone Company, $15,000,000. How is this money to be paid? From what sources ? A. T. & T. and Halsey, Stuart & Co. brought about the trusteeship in order to protect their interests, naturally. 'I'hc terms of the trusteeship are that two out of three of the trustees will decide any question. You can imagine how Messrs. Otterson and Stuart will vote. With Fox ? Hardly likely ! If such is the case, is Fox in or out ? Whth the passing of the control from Fox to Halsey, Stuart & Co. and to A. T. & T., there is bound to be a retrenchment. Already there has been a stop in the buying of theatres, which Fo.x was doing by short term notes. The next retrenchment will naturally take place in production. So the thing that you would have to take into consideration is this : If there were to be a retrenchment in production ; if the appropriations for the ])roduction of the pictures, made in the beginning of the season, were to be reduced, will the quality of the Fox product suffer? As this is a question that no one can answer at present, it must he answered by you who either have bought the Fox product or contemplate buying it. As to the personal affairs of William Fox, that is another matter altogether. How much he lost in the crash is known probably only to his nine brokers and to him.self. But it would make you dizzy if you knew the figures. You would think that there isn’t as much money in the United States. Some persons have placed the figure at $60,000,000. But it is hard to know the exact figure. The question that now arises is this : The mad adventures of W'illiam Fox in the motion picture industry ; his crazy program of theatre acquisition, is going to cost such of the American public as have bought Fox stock millions of dollars. Is there going to be no attempt to pl.ace responsibility on any one. Why don't you ask your representative at Washington if there is going to be an investigation of the Fox crash? This morning’s papers (December 16) state that the Fox trustees plan the consolidation of the Fox holdings, mentioning Loew’s incorporated specifically. But how can a consolidation of Loew’s, Inc., with Fox be effected when the United States Government has brought a suit against the Fox Corporation charging it with monopoly just because it acquired the Loew interests? It is natural that no such consolidation can take place before the courts have declared the Fox Corporation innocent of any attempt to create a monopoly. If the Supreme Court, to which the case may eventually be taken, should uphold the Government, there will naturally be a divorcing of the Fox and the Loew interests. But how ? In addition to the 430,000 shares, which he bought at $120 per share, William Fox bought from the open market an additional 250,000, around $80 a share. All this stock cost him about $80,(XK),(X)0. If it were to be sold at its present market value, it would realize about $30,000,000. Who is going to stand the loss of $50,000,000, the difference between the purchase and the possible selling price? What a headache some people must have ! NEW INFORMATION ALTERING THE STATUS OF SOME WARNER BROS. PICTURES In the issue of December 14, under the heading “THE STATUS OF SOME WARNER BROS. ROAD SHOW PICTURE.S,” I stated that “Say It With Songs,” “General Crack,” “Show of Show’s,” and “Gold-Diggers” are Road Show pictures, because they were shown in this city in accordance with the terms of the Road Show defining clause in the early Warner Bros, franchise. .A.dditional information received at this office alters the status of these pictures. The clause in the early franchises stated, as I have said before, that certain Warner pictures, in order to be put in the Road Show class, must be shown “in the main theatrical District of New York, Chicago and one other key-ix)int. ...” These four pictures have not, as I have been informed reliably, been shown in Chicago on the basis of two shows a day at advanced admission prices, h'or this reason they are not Road Show pictures. In giving you this information, my object is not to urge any one of you to reject these four picture as Road show pictures for this reason, but to give correct information. There is no question that, from the quality point of view, they are Road Show pictures. But they are not such from a legal point of view, because they were not shown in Chicago as the franchise provides. This enables any exhibitor that holds an original Warner Bros, franchise to raise this point, if he should so choose. A DIRTY MESS According to the daily papers, William C. Redfield, former Secretary of Commerce, chairman of a commission of the Federal Council of Churches in America, has religned when he learned that Rev. Charles Stelzle, who was instrumental in organizing the CouiKil’s motion picture committee, was in the pay of the Hays organization as well as of the Federal Council of Churches. He did not want to work, as he said, under such conditions. The same news items stated that the Federal Council of Churches dropped Rev. Stelzle, whom it engaged recently as its publicity representative ; and that the Federal Council will fight the Hays organization and Mr. Hays himself, because the Hays group “soft-sfiaped” the churches and tried to keep the motion picture industry in g<xxl graces by dinners and “other means.” Two days later the papers stated that W’ill H. Hays and Gov. Carl E. Milliken were dropped as directors of the Church and Drama Association, because they tried to use the association for film propaganda. Carl E. Milliken, in a statement printed in the daily press of December 16, states that the Church and Drama .'\ssociation has dropped him and Mr. Hays as directors not for trying to “use” the association but for refusing to support the association financially, after a demand made by Rev. Cieorge Reid Andrews, the Association’s secretary. 'I'here is no question that Rev. George Reid Andrews will come out with a counter statement, denying these accusations, and perhaps accusing Mr. Hays of trying to buy out his support by all kinds of inducements. It is possible also that others may come to the supjiort of Rev. Andrews by statements against Messrs. Hays and Milliken. Gov. ^lilliken may be compelled to issue other statements in an effort to clear themselves, and so on, until both sides get tired issuing statements and quit. In the meantime, the poor exhibitors will suffer just because the general public has not yet been educated enough to distinguish persons and motives in the motion picture industry. The policy of Mr. Hays has been wrong with the churches just as it has been wrong with the exhibitors. He has made a failure of his mission and it is about time that he realized it himself. THE ABSENCE OF NATURAL COLOR SCENES IN “MARRIED IN HOLLYWOOD” When “Married in Hollywood,” the Fox singing and talking picture, was shown at the Ro.xy, this city, it contained several scenes in natural colors ; and I so stated in my review, which was published in the September 28 issue. As a result of this information, several of those who had this picture Iwokcd so advertised it to their customers. Imagine the embarrassment they felt when they showed it and found out that there were no scenes in natural colors in it. Their veracity has naturally been questioned, and ne.xt time they advertise that a particular picture contains scenes in natural colors, they will not be believed. 1 looked up the Fox publicity put out on this picture at the beginning of the season, but found no mention of natural color scenes. For this reason, those that have not yet shown this picture have no claim against Fox. But the matter differs with those who have shown it and advertised it as containing scenes in natural colors. These may bring an action against Fox for fraud, unless the Fox organization sends them a letter absolving them of any blame, which letter such exhibitors may publish in their local papers to help them re-establish themselves in the confidence of their customers. They may even demand a readjustment of the price.