Minutes of evidence taken before the Departmental Committee on Cinematograph Films (1936)

54 COMMITTEE ON CINEMATOGRAPH FILMS 12 May, 1936.] Mr. F. W. Baker, Mr. M. N. Kearney, Mr. A. Korda, Mr. N. Loudon an.! Captain the Hon. R, Nohton. [Continued. the Group. (Mr. Loudon) : I should think the members themselves would have something to say. 351. Film members are subject under the statute to the same rules as other members of the Federation of British Industries. Are you satisfied that alien companies operating in this country charge a reasonable price for films to the — technically Britishcompanies which they control? Do they charge, for example, the same rate as they do to American companies or, by charging a very high price, provide that the profits shall be retained in the United States, for example, whilst the company here is barely able to make a profit? — That is a matter the revenue authorities do go into. 352. Do they go into it? — As we understand it they have an agreed arrangement with American renters by which they assess the correct amount that should bo returned from profits taxable in this country. 353. Have you any reason to think British companies suffer as compared with American companies in their assessment to income tax? — It is difficult to reply. I should say the American companies got off reasonably well, and your point gives rise to another thing exercising us a good deal at the present moment, and that is the American taxation upon the earnings of British films in America. They are seeking to apply American taxation to remittances from the earnings of British films in America before the remittances have left the United States. They are actually doing it now. 354. You are seeking to eliminate the provision that a scenario writer must be a British subject, and you mention you have numerous foreign artistes to whom you pay large sums. Do you consider those persons are advantageously placed compared with British subjects in their relation to the Inland Revenue Commissioners? That is effectively secured? — Yes. (Capt. the Hon. It. Norton): There is a custom that the Revenue will apply onethird of their salary to be counted for expenses, and that applies to foreigners as well as English. 355. Would that apply to a scenario .writer who might not be located here for more than a short lime? — Yes. 356. I am still in doubt as to the point raised by the Chairman : certain technically British companies which are in fact controlled organisations of American producing companies and allied with the renters' renting organisations in this country produce films, but you say they are ineligible for membership. But that is not strictly correct, it is? — (Mr. Kearney) : Yes; there are one or two producing companies, technically British, but in fact foreign-controlled and branches of foreign producers, who are not members of the Film Producers' Group. 357. There are bad films being made by companies who are eligible for membership? — We do not deny it. 358. Your memorandum might have been better worded in that respect? — With all respect, I think it is both carefully and accurately worded. (Mr. Holer): There will always be a proportion of bad films. (Mr. Kearney) : There are certain American companies here whose branches here are registered British companies. I mention the name of one. not with any lack of respect, or with any wish t<> criticise or pillory it in any way. Some of them have their own producing organisation. They are British registered companies established here for one purpose only and that is to rent American films and to acquire the quota films required to enalilo the American films belonging to their principals to lie rented. They are technically British companies, but, by capital control they are really entirely branches of the foreign companies. These could quite conceivahlj be considered eligible for membership, hut genuine British producers have not wanted them as members of the Grout) and we have a perfectly good method of getting out of it if they apply. In some cases they have applied. <''"//'. the Hon. It. Norton): If I might make a suggestion. We might give the Committee the number of pictures those companies made last year. (Mr. Loudon): Fox had 13 pictures last year they made at their own studios; and Warners and First National together, 19. I woidd like to add some of the 19 were not actually produced by them in this country. Warners registered the two silent Indian pictures about which there has recently been trouble. 359. Is there any other industry in this country which is so largely under alien control that you can think of? — (Mr. Baker): Manufacturing industry? 1 do not think so. 360. Is there any other distribution concern which is so largely under alien control at present? — (Mr. Loudon) : You might say typewriters, I think, possibly as the largest other industry. 361. In a discussion with Dr. Mallon you were giving examples of deliberate attempts to bring British films into disrepute in theatres abroad. Have you in your experience found that being done deliberately in this country also? — (Capt. the Hon. H. Norton) : Yes, Sir, I am prepared to say that. (Mr. Baker) : I think one method of doing it is by showing the films at what are termed the dead hours. 362. But also by exhibiting them in juxtaposition with the finest foreign films at a given moment in order to bring them into disrepute? — (Capt. the Hon. R. Norton): Some years ago when I was in the distributing business I was asked if I could pick a really bad British picture for the West End of London. That was when I was not a producer, and I was asked toy an American concern. 363. Is it within your knowledge that claques have been hired to bring a good British film into disrepute? — I would not like to say whether they have been hired for the purpose. {Mr. Kearney) : This rather brings up the point of publication of the evidence that may be given. (Capt. the Hon. It. Norton) : 1 have no objection to a statement of my personal experience being taken down. 364. (Sir Arnold Wilson) : (Will you give your personal experience? — I meant the one I have just described. (Mr. Kearney) : It is common practice when films are run in a theatre to have your not particularly good, if we do not call it bad, English picture running in conjunction with, either before or after, a really first-rate American film, and the public necessarily, whether it is intended that it should or not, naturally draws the conclusion that the American film is good and the British bad. Whether deliberately or not, it serves a dual purpose. It enables the foreign company to fulfil the law as it exists and it shows up the good quality of the American film as opposed to the bad quality of the British. Most of the British films so shown are second features. 365. If the two films were not in the same ownership it might be a cause of action in the Courts. There are I believe decided cases of -hop windows where the derisory exhibition of inferior ware of one kind with the superior ware of another has been regarded as actionable: (Mr. Loudon): I bhink the allocations of returns arising from two pictures where an American distributor handles a programme with an American picture and a British picture, his allocation of money to the British producer is such that the British picture suffers. lie oilers the British producer a contract on a basis of a lump sum down in advance of 50 to 60 per cent of its gross receipts. He then distributes that picture and says that it will be distributed to the best possible advantage, and there is never proof it is not distributed to the besl possible advantage lmt I do not think except in the case of United Artists, any American renter has ever distributed a British picture