Harrison's Reports (1946)

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A REVIEWING SERVICE FREE FROM THE INFLUENCE OF FILM ADVERTISING Vol. XXVIII SATURDAY, JANUARY 26, 1946 No. 4 THE PRODUCER PROPAGANDISTS ARE AT IT AGAIN The three days of final oral arguments in the Gov ernment's New York antitrust suit against the eight major companies, which was brought to a close last week after being in litigation since June, 1938, were marked by frequent remarks and interjections on the part of the judges, who asked many pointed questions of both sides. Some of their remarks, particularly those of Augustus N. Hand, the presiding jurist of the three judge statutory court, were featured prominently in trade paper stories, giving one the impression that the defendant'Companies would emerge from the trial victorious, or, at the very worst, be compelled to make some changes in certain of their trade prac tices with little, if any, injury to their theatre holdings. These pessimistic stories were inspired chiefly by Judge Hands following statement, made during the arguments presented by Robert L. Wright, the Gov ernment's counsel: "... your aim is to upset all ownership of theatres. Now that is an extremely drastic remedy that I should think was extremely unlikely that this court will give. But that is merely a first impression of myself, and I've got to study this very carefully in other ways than just by merely reading through the briefs — once, of course." While it is true that the aforementioned statement, as well as others made by the court during the three' day hearings, leave one with the feeling that the judges are not convinced that divorcement is the answer to the complex industry problems, and that they are reluctant to grant such relief, it should be remembered that their ultimate decision will be based on facts and propositions of law. And, if the judges find that the defendants have violated the law, it is their responsibility to take the necessary remedial measures even if, in their opinion, such measures are harsh. As pointed out in the Government's final brief, the defendants' claim that theatre divorcement would be injurious to their operations without benefitting the public is a matter for Congress, and not for the Court, to determine. At one point during the arguments presented by Wright, Judge Hand stated that he was trying to break up an industry system without devising a substitute system. Wright replied that it was not an obligation of either the Government or the Court to set up a new system, adding that the only duty of the Department of Justice was to enforce the law, while the court's function was to determine if there were any violations of the law. "The court," said Wright, "cannot shy away from the complexities of the case because the remedy would have to be too drastic. Where the law requires it, it has to be done." In his argument, Wright, contending that the Government's charges were questions of law, main' tained that clearance per se is illegal; that established runs should be eliminated and pictures sold on the auction block; that the Consent Decree should be scrapped, particularly insofar as it provides for the arbitration of clearance; and that not only divorce' ment but also dissolution of the affiliated circuits is required to restore free competition to exhibition. On the opening day of the oral arguments it struck some court observers that Wright seemed confused by the questions put to him by the court, but all agree that, in his concluding argument in rebuttal, Wright's presentation and broad analysis of the issues involved were masterful. The attorneys for the theatre'Owning defendants were, of course, most vehement in their denials of the Government's allegations, each emphasing that the Government had failed to prove its charges, dedaring that divorcement would bring chaos to the industry, and asking that the case be dismissed. The attorneys for the "Little Three," the non' theatre-owning defendants, defended block-booking and contended that the exhibitors favored full season selling. Columbia's counsel argued that his client would be ruined if the court outlawed block-booking, and counsel for Universal and United Artists declared that the elimination of clearance and run, and the selling of pictures on the auction block, would lead to organized chaos in the distribution of pictures and would give no security to the exhibitors. With oral arguments concluded, it is expected that the court will make a study of the case without delay, and that a decision will be forthcoming in from two to three months. As it has already been said in these columns, predictions on the outcome of lawsuits are, at best, guess work; one would have to make a thorough study of the intricacies of the evidence, the testimony, and the numerous briefs, before one can qualify as a predictor. Nevertheless, the producer-propagandists are in full swing with their predictions on the probable outcome of the trial, some of them stating that the chances for complete divorcement are slim, and that whatever remedies may be ordered relative to (Continued on last page)