Boxoffice (Apr-Jun 1939)

JOHN FORD EXPLAINS M&H THEATRES SETUP AS MORSE-ROTHENBERG ACTION PROGRESSES Two Companies Exist; A Corporation and Holding Firm An Epidemic of Lawsuits Boston-— New England has an epidemic oi lawsuits. Present anti-trust actions include litigations oi Morse and Rothenbarg, A&W Amusement Co., Frank LePage, Kenneth Gorham, C. F. Millett, Andrew Tegu, and Edmund G. Pollard. Other diverse court expeditions include the George Solomon suit concerning the Charlestown Theatre situation, action oi Nat Haase against Federal Sales, Ascap suits against Frederick E. Lieberman and others, Sam Haase real estate commission suit against Morris Pouzzner, E. M. Loew-AFL picketing problems, and numerous Bank Night actions. Boston — The complicated Maine and New Hampshire Theatres setup was explained to the U. S. district court by John J. Ford, circuit head, a® hearings on the Morse and Rothenberg anti-trust case continued here. Ford, who has been general manager of the Maine and New Hampshire circuit for approximately the past dozen years, explained that there are two Maine and New Hampshire Theatres companies, one a Massachusetts corporation and the other, in Maine, a holding company. Ford heads both concerns. The Maine corporation, organized in 1919, “was the holding company,” Ford explained. “It had interests in the various theatres at that time operating in Maine, New Hampshire and Vermont, and at that time that company served the theatres in that section of the country the same as Maine and New Hampshire Theatres Co. of Massachusetts now is doing.” “Now,” asked Philip Hendrick, master sitting on the case, “your method of operation is for each community in which you have theatres to have a separate corporation for each situation or each locality?” “They generally have separate interests,” Ford said. “For example, in Augusta maybe 50 per cent of it is owned by local interests and Maine and New Hampshire may only have 50 per cent of that. That is why it is necessary to have these different companies, because of the ownership of the stock.” The master interrupted at this point with, “I am not particularly interested in that except on the general setup of each locality having its separate corporation operating in that locality. Whether you have 50 per cent, or 100 per cent, or 25 per cent, that is the way it is done?” “Generally. There are one or two exceptions to that.” “Then we have the Massachusetts corporation organized in 1929?” “That is right.” “And that corporation is the one which does the buying and booking of films for all of its subsidiary corporations?” “Yes, sir.” “And appoints the managers for these subsidiary theatres?” continued the master. “Yes, sir,” again replied Ford. “The manager, in turn, hires his own help and runs his own theatre, the manager being accountable to you?” “Yes.” “Now, the profits, if any, from these various companies go into the Maine corporation?” “No, sir. They go direct to that par ticular company.” “To the particular corporation?” pressed Master Hendrick. “Yes.” “All right. And through stock interest it gets into the Maine corporation?” “Its proportionate share.” “That is what I meant when I said its stock interest. The Massachusetts corporation, I assume, receives some fee or service charge for its supervision, for the work it performs?” queried the Master. “Yes,” replied Ford. Subsidiaries Pay for Services “And in addition to doing that, it operates two theatres of its own in Fitchburg?” “Yes. It receives nothing from Maine and New Hampshire Theatres of Maine because they do no business for it.” “I understand that, but there is a charge made to the subsidiary corporations?” “That is right.” “I think I understand the setup now. By what company are your expenses paid, Mr. Ford?” “Each company. When you say expenses, you mean salary?” “No. Say, travel expenses and things of that kind,” questioned the Master. “I don’t get any travel expenses. My salary is based on covering everything.” “All right. Then your salary is paid by whom?” “By the different companies. Allied Theatres pays me so much a week, the Lewiston Union Co. pays me so much a week, Maine and New Hampshire of Boston May Expect Seymour Kreiger Boston — -Seymour Kreiger, department of justice attorney conducting the anti-trust investigation in the east, is expected to return to Boston within the next few weeks. Kreiger indicated to this publication, upon his former brief visit here, that he would probably be back to conclude local contacts. He said a few days ago in New York that his near future campaign would no doubt include another Hub trek. Massachusetts so much. Every theatre company pays me an agreed upon amount each week,” explained John J. Ford. “Do you receive anything from Maine and New Hampshire Theatres Co., the Maine corporation?” “Yes.” “Part of your salary is paid by that company, too, is it?” “Part of my total salary, not part of my salary as general manager.” “What is the compensation paid you by the Maine company for?” “Services I perform for the company.” “As manager of the Maine company?” “Yes.” Ford, in reply to George S. Ryan’s questions, said that he received no travel expenses but that his salary covered everything. He said that his salary was paid by the different companies, each theatre concern paying him an agreed amount each week. A disputed law arose when Ryan asked Ford the name of the lessee of the Music Hall in Lewiston which the Maine and New Hampshire Theatres Co. held by a 30year lease which began in 1919. Upon the objection of John Spalding, defense lawyer representing the Paramount Affiliated operating concern, Master Philip Hendrick asked, “What bearing has it on this case, Mr. Ryan?” “It has a bearing on the intention of the defendants to monopolize. One of the methods sometimes used in monopolizing is to acquire control of enterprises and then close them, keep them from operating, in order that no competitor may get them. It has been well recognized in the anti-trust laws as one of the signs of monopoly, the acquiring of an interest or acquiring of a property, and then scrap:ping it or closing it,” explained George S. Ryan. “I can assure your Honor that if we are going to try out Lewiston and there is going to be any inference drawn that there was a monopoly there, we will have to go in and try out the whole town of Lewiston and have another anti-trust case on here,” said Spalding. “That is all it is going to mean on collateral issues. I think we are going pretty far afield. I will admit that I have not objected to a lot of things that have gone in, in the past, but (Continued on next page) BOXOFFICE :: June 17, 1939 NE 67