Variety (Dec 1939)

Wednesdajt December 6, 1939 PICTURES VARIETY MORE U. S. HEART-TO-HEART Court Testfly Tells Adas Corp. s Att y to Stop Stalling and Speed Up RKO Reorg; $3.50-3.75 Share? 'You go back to Atlas and tell them I'm real angry', declared Fed- eral Judge William Bondy to Hamil- ton C. Rickaby, attorney represent- ing the. Atlas Corp., in the N. Y. fed- eral court yesterday (Tues.). The occasion was a request by Rickaby for a further two-week postpone- ment of the submission by Atlas of an underwriting agreement for the new,RKO common stock. Judge Bondy refused the two-week postponement and granted the At- las attorney one week. The judge had been informed by counsel that at the board of directors meeting on Monday (4) George J. Schaefer, president of RKO, had approved most of the steps being taken and much progress was being made. The judge refused to listen to this ar- gument. 'I've been getting many let- ter from creditors," he said. 'There are many strenuous protests - over this delay. I think you have a record now as the oldest case in court. It is up to me, and not the board, to de- cide it the agreement is fair. You tell Mr. Odium to submit his prop- osition to me. If I don't like it I -will then decide whether to dismiss the entire proceedings or to give the company more time.' Report Atlas Set to Go It is understood that Atlas is really prepared to go ahead with its under- writing, but wished to stall at this proceeding until an application for a writ of certiorari, which had been filed with the U. S. Supreme Court, by H. Cassel St Co., and the Copia Realty & Fabian Operating Co., ap- pealing creditors, had been decided. Decision of the Supreme Court, whether or not to allow a hearing, Is due within two weeks. However, Atlas Is now only al- lowed one week in its adjournment, so that it may be forced to submit Its offer before it knows what dis- position will be made on the appeals. At Monday's (4) board meeting, Schaefer made a report on the Eu- -ropean—situation—and—told—of—the- economies that had been put into effect to stabilize the situation. The new conditions that arose as result of the war are not yet surmounted, said the RKO president, but will be soon. The new underwriting agreement was discussed and is reported to be somewhat less favorable than the original one, which offered $4 a share on 375,000 shares. The new one is understood to be somewhere between $3.50 and $3.75 a share. HORRID LETTER Warners noesn't Like No. 2 in the Alphabet—All 'A' Fix Bryan Foy, chief of the low budget production unit at Warner Bros., left for the Coast Friday (1) after two weeks of confabs in New York on future product. Foy declared the new WB policy will eliminate B pix. It will make moderate-budgeted A's instead, con- sidering B a horrid letter. Bill Jacobs, one of his associate producers in the lower B class, went off the payroll last week. Gordon HoUingshead, in charge of special short subjects, is slated to remain with Foy under the new setup. SEE HAPPY B O. DAYS IN DIXIE WAR SCARE OVER, REP HIRES BACK DROPEES Hollywood, Dec. 5. War scare is over as -far as Re- public is concerned. Herbert Yates, who ordered economies in Septem- ber, is re-hiring old employes and plans to go through with the origi- nal program of 52 features and four serials for 1939-40. With Rep's $750,000 'Dark Com- mand' before the cameras, Yates signed Garret Fort to write the final script for the next high-budgeter, •The Lady from New Orleans.' Earl Hurtze has been ordered to scout the air lanes for more radio talent. 'Na- tional Barn Dance,' first of the fea- tures to use radioites, is slated to roll tomorrow (Wed.), Rogers' 2 for Col. Hollywood, Dec. 5. Charles R. Rogers closed a deal to make two pictures for Columbia re- lease. First is to be a sequel to 'Our Neighbors—the Carters,' which he tf-cently made for Paramount. Producer moves' Into the Gower street studio this week. Atlanta, Dec. 9. Continued Increase of industrial activity in southeast is reflected in roaring blast furnaces and humming cotton spindles as revealed in Octo- ber review of business conditions by Sixth Federal Reserve Bank District last week. Fat payrolls are putting money into circulation and show business is getting its fair share of this dough in Georgia, Florida, Alabama, Louis- iana, Mississippi and Tennessee, states comprising Sixth District. Steel mill activity in Birmingham area continues at high rate, report stated, with all of the 18 Alabama blast furnaces in operation. A 4.9% increase in Alabama, Georgia and Tennessee cotton mill operations for October was reported, the daily av- erage of cotton consumption in the same month exceeded previously ■only-in-Febr-uar-y-and-Mar<;hr-1937.— Because farmers sold their crops later this year than they did in 1938, they received nearly two and a half times as much from marketing them in September as they did in August last year. The Dixie prosperity picture is definitely rosy. Another Full-Length Inker by Fleischer Hollywood, Dec. 5. Max Fleischer is readying another feature-length cartoon to. follow 'Gulliver's Travels' for Paramount release. Picture will be filmed at his Miami studio, Writing staff ar- rived from Florida to confer on the story with Dave Fleischer, director, who is here putting the finishing touches to 'Gulliver.' Spanish version of 'Gulliver' another Full-Length Joker starts this week with Luigi Luraschi, studio cencorship editor, supervis- ing. Film is lo be entirely re- scored, using new voices and trans- lated lyrics. Revised edition is for Latin-Amer- ican trade. Ostrow Leaves Metro Hollywood, Dec. 5. Lou.Ostrow, associate producer in charge of Judge Hardy pictures at Metro, turned in his resignatioa. ' He plans a long vacation before considering a new job. THAT GOOD? Hollywood, Dec. 5. Sneak preview of 'Mexican Spit- fire' induced RKO to schedule three more ' pictures co-starring Lupe Velez and Leon Errol. General release of 'Spitfire' is dated in two weeks. TO PIILIIVEII PIX Resume Powwows After Jan. 1—Other Problems Had Sidetracked Films for Sev- eral 'Months — Arnold's Hardboiled Attitude An other Factor SPREAD-THE-WEALTH Washington, Dec. 5. Resumption of talks between the U. S. Commerce Department and film industry is expected after the holi- days, despite intimations the peace program has lost appeal for produc- ers following the Justice Depart- ment's scornful rejection of the trade practice code. ' Studies of various trade problems are said to be con- tinuing, although no huddles have occurred for nearly six months and none is scheduled for any definite time. Pressure of other business is cited as the chief reason why the Com- merce Department pacifiers have made no further attempts to work out solutions to some of the indus- try's worst worries. At present, Prof, Willard Thorpe, head of Secretary Hopkins' personal brain trust, is up to his neck in armistice maneuvers involving the potash people and the Justice Department, besides being loaded with chores for the Tem- porary National Economic Commit- tee (monopoly probers). When he gets the fertilizer worries off his mind he plans to pick up the film situation. Uncompromising attitude of the D.J., as reflected in Prof! Thurman Arnold's snooty rejection of the self- regulation idea, is holding back the Commerce Department, it was indi cated. While the Hopkins aides still insist they're not trying to lay the groundwork for a consent decree, the adamant stand of the trust- busters is a notable obstacle. For the industry people, harrassed with the litigation started by Arnold's -menrJeeL-they—hav-e-more-impottant. worries and are skeptical about the possible accomplishments of the Commerce Department. Justice Dept. Tough There is little evidence, mean- while, that Arnold's sternness toward labor unions will beneflt the fllm in- dustry. Or radio, either. It is in disputable that the D. J. prosecutors look on the fllm majors as an eco- nomic ogre which must be forced to reform, so they aren't disposed to help the studios or exhibitors with their union difficulties, beyond the inquiry into 'racketeering' in Los Angeles. From the D. J. viewpoint the major distributors and chain exhibs are the worst offenders in the field of restraining competition, while there is no evidence at hand that the unions are guilty of conduct that can be termed a serious breach of the anti-trust statutes in the film field. How the commerce interveners can help the industry in its labor diffi- culties is difficult to imagine. The National Labor Relations Board has exhibited no readiness to yield to curbs from other branches of the executive wing of the Government, while the Commerce and Labor de- partments do not see eye-to-eye on many natters. If the parleys re- sume, studio spokesmen may be able to focus attention on the recent Hol- lywood tug-of-war .but, aside from moral encouragement, it's hard to see how they will derive any bene- fits. As has been pointed out so often the general New Deal attitude is that an industry which pays such fat salaries to talent and executives at the top can share the wealth more generously. The Commerce Department inci- dentally is waiting for more . dope about the effect of the war on fllm trade. So far only sketchy bits of info have been picked up, while U. S. attaches abroad have been too busy with other subjects to give any com- prehensive reports on- the theatre New Schedules of Pix Amortization, Due to Foreign B.O. Dip, Compels Big Writeoffs in the First 8 Weeks RADIO TENORS FOR FILMS Barry Wood and Dennis Day Getting Celluloid Nod Two radioites set for Paramount pictures are Barry Wood (Lucky Strike 'Hit Parade') and Dennis Day, Jack Benny's new tenor. Day is already in work with Benny on a film but a separate deal for him is virtually set. WARY0F'4(M1 PROD.PLANS Despite trip of Sidney Kent and Herman Wobber to the Coast, 20th Century-Fox will lay no definite pro- duction plans for 1940-41 until Janu- ary or February. Company execs feel it would be an error to make any decisions or announce any plans at this time, claiming they want to wait until the last possible moment in order to get a better picture of what the European situation will be It is felt at Fox that any budget- making or story plans may have to be revised continually throughout the year of 1940, depending upon what breaks in Europe. Although film business in England is now good and the 50% coin restriction is not a terrific hardship, it is pointed out that all plans would be upset with a single bombing of London, result- ing in theatres being shuttered, or by a change in the currency quota. DICK POWELLS (JOAN BLONDELL) IN 1 HLM liek— -Powell—and—^wife,—Joan- Blondell, will work together in a film for Edward Small early in the spring. Both are now without con- tracts to other producers. Powell Is in the final week of a p.a. tour in Milwaukee and returns to the Coast at the end of this week for huddles with Small. Miss Blondell, who was recently In New York with Powell, is cur- rently marking time in Hollywood. Par Execs Back East After Studio Huddles Hollywood, Dec. 3. Paramount's eastern execs train back to New York today ("Tuesday) after budget and production parleys at the studio. In the group are Bar- ney Balaban, Stanton Griffis and Russell Holman. Neil Agnew planed back last weekend, while John Hicks, Jr., reached New York yes- terday (4). Homeoffice toppers are due back in January. Holidays don't mean a thing to the production heads at Paramount, which will have six features in work during Christmas week. PISn is to build a backlog of pictures for the early spring market. In production now are 'Safari,' 'Buck Benny Rides Again,' 'At Good Old Siwash' and 'The Way of All Flesh.' Slated to start before the holidays are 'Golden Gloves' and 'A Night at Earl Carroll's.' business. Unofficial advices are that the shock isn't as great as was feared, although restrictions on with- drawal of money looks, liable to be a general worry. The latter prob- lem, however, is one that is most likely to be tackled on a broad front, rather than on behalf of particular lines. New schedules of fllm amortiza- tion either have been established or shortly will be placed in effect be- cause of the decline in revenue from the foreign market. First of these drastically altered amortization set- ups appeared last week in Warner Bros, annual statement, and similarly changed slates for amortization will flgure in film company financial statements from now on, according to best Wall Street flnancial opin- ion. Growing tendency, prompted no doubt in recognition of the decline in foreign revenue during the last 15 months, has been to write off more negative costs in the flrst eight weeks of a picture's release than ever before in the past. Basic, reason for the changed amortization alignment is that actual' or anticipated decline in foreign in- come, accelerates writeoffs in earlier stages of a film's release. In a nut- shell, picture company officials flg- ure that greater writeoffs must be made in early periods, and that after a production has been out for 39 weeks, only a negligible portion of film costs can be amortized. - For example, Warner Bros, cumu- lative percentage of film costs writ- ten-off rises to 87'/4% in the first 39 weeks after release, leaving only 9% to be written off in the subsequent 13 weeks. In the new setup, a bare 3%% of total picture costs is amor- tized in the last 13 weeks of the 65- week amortization period. Necessitates Big Rentals Early All this means that the picture company, with $100,000 gross the flrst four weeks, would show less profit in this period under the new amor- tizing arrangement unless there is a real pickup in early ftrst-run in- comfe. For example, the Warner Bros, table writes off 19%% in the flrst four weeks instead of 15% as heretofore. Without flguring in print costs and advertising, a fllm com- pany would show only $81,000 net profit instead of $85,000 (under the 15% wr iteoff) if t h e picture con- tinued domg $100,000 in the first four weeks. Which is why plenty of pressure currently is on to get In- (Continued on page 8) Trad* Mark Reglatered FOUMDED BT SIMB SILVERM.4N Fublliihed Wcekir bjr VARIETT, Inc. Sid .Silverman. Prenldent ISi Wait 4eth Street, New York City SUBSCRIPTION Annual tlO Foralrn Ill Sintfle Coplea 2S CeDta Vol. 138 110 No. 1.1 INDEX Bills ...48-49 Chatter 55 Dance Bands; 39-41 15 Years Ago 42 Film Booking Chart 18 Film Reviews. 14 Film Showmanship 8 House Reviews 46-47 International News....... 12 Inside—Legit 50 Inside—Music 41 Literati 54 Legitimate 50-53 Music 39-41 New Acts. '. 45 Night Clubs .......42-45 Night Club Reviews 44 Obituary 54 Pictures 2-18 Radio 19-38 Radio Reviews 26 Unit Reviews .". 45 Vaudeville 42-45