Boxoffice (Jul-Sep 1939)

VEER TOWARD RELIEF D. S. CODE REJECTION PRESAGES COURT FIGHT ON SUIT TO FINISH See Arnold Opinion as UA FUes Aiiswei; Sweepinglv Pointing to Avoidance r\ ^ Of More Actions Denies Govemment Charges New York — Topline executive opinion rapidly crystallizing here figures rejection of the code by the department of justice on the stand it is predicated on an illegal structure sharpens the issues in the government’s all-industry suit and points the way toward the need to fight to the finish tlie issues involved in the courts. While first flush reaction was one of amazement, chagrin and disappointment, ever more perceptibly grows the conviction Thurman Arnold actually has done the industry a decided favor in that, by his surprising and totally unexpected ruling, he has pointed the way to avoid additional litigation, possibly criminal. One executive typifying this school of thought, explains in this manner: “Of course, we expected nothing of the sort. But now that we have had a chance to reflect, Arnold, no doubt, has done us a favor in declaring himself on his future course if we had proceeded with the original intention of implementing the code regardless of what the department of justice thought about it. In other words, he has supplied us with essential information in guiding our future. If it means we cannot go ahead with the code, it also means the responsibility is not ours and that, at least, we know how to avoid a pitfall which would probably create additional headaches in the form of further governmental legal action.” In the melee of ideas which trail the Arnold letter to the attorneys representing five major film companies much thought is turning to ways and means of circumventing the justice department’s attitude. It is suggested the essential code provisions might be applied by one company grafting them onto its regular contracts. It is felt, however, that any such plan as this would circumvent the original purpose of code formulation which was to effect a document for the use of the entire industry, not the customers of one company. On the other hand and even if additional companies were to follow any single trail blazer, the fear is expressed that elements of conspiracy would suggest themselves to Washington with the ultimate result of placing the seven companies which were parties to the code exactly where they appear to be today in the eyes of the department of justice. “In the event Additional developments on the wide-flung anti-trust suit front will be found on pages 17-20-32 of this issue. Special Basket for Complaints New York — One local exchange manager says he has been getting so many complaints on clearances from exhibitors asking for changes he has already purchased a special basket where they are filed. Little attention is paid to the letters, the branch head states, because all an exhibitor has to do is write a letter and put a two-cent stamp on it. After it is mailed it is seldom that the exhibitor brings up the matter in person. each company were to adopt code highlights by individual decision arrived at, you know very well such individual action would not be believed,” one opinion points out. “This merely would be a revival of the situation which has prevented the major distributors from acting along identical lines for many years now. We simply would find it impossible to convince any questioning authority that it is a case of seven generally similar decisions, individually reached.” An additional stumbling block to solo enterprise along any such lines is arbitration. Many of those who have been identified with code development believe no agreement, regardless of what it concedes, would be effective without the policing arm which arbitration would provide. By that, they refer to arbitration to which the majors, with the exception of UA which is not a code participant, subscribe. But this is not possible, as the code is not possible, under the Arnold mandate. No Govt Objection, the Beacon Pool Effective New York — ’The department of justice, it is learned, has no objections to the three-way pool by Loew’s, RKO and Skouras in the operation of the Beacon, and the five-year lease, approved by the federal court, now is in effect, according to Maurice Finkelstein, co-trustee with Arthur Mayer for the theatre The department of justice angle entered into the situation when Senior Judge John C. Knox, in recently commenting on the government’s move for a preference on the calendar in connection with the all-industry suit, referred to the Beacon as being unable to get product “for the love of money.” New York — With minor exceptions, UA enters sweeping denials to the government’s charges in the all-industry suit as it affects the company, in its answer filed in federal court. This company is the last of the eight majors to answer. Specifically, there are 52 denials covering 253 paragraphs and sub-divisions of the government’s petition. “With some degree of accuracy and in part” the government’s definitions of production, distribution and exhibition are admitted. The company also pleads affirmatively that “each and every producer using the facilities of UA for distribution is an independent producer.” It also is held that the company, acting independently and separately “made contracts with exhibitors wherein and whereby UA Corp. reserved the right to designate and/or which provided for clearance and/or which prohibited the showing of a certain picture as part of a double bill and/or imposed a score charge and/or a minimum admission to be charged at the theatre exhibiting said picture or pictures.” That allowances for advertising are deducted from film rentals “where in the opinion of UA such reduction was warranted” have been made, it is admitted, as well as provisions for moveovers which “would mean more revenue.” Dismissal and costs are also sought. While UA admits some of the companies and individuals mentioned in the government’s complaint exist, the answer does (Continued on page 38) Not Directors of UA Distributing New York — Samuel Goldwyn, Charles Chaplin, Mary Pickford, Douglas Fairbanks and Edward C. Raftery are not directors of UA Corp., the company states in its answer to the govemment. Miss Pickford also was listed by the government as first vice-president, Raftery as assistant secretary and Loyd Wright as secretary, all of which is denied. Attilio H. Giannini and George J. Schaefer, who were mentioned by the government as president and vicepresident, respectively, are no longer with the company. The answer, is in the name of UA, Harry D. Buckley, Arthur W. Kelly, Harry J. Muller, Dennis F. O'Brien, Raftery, Emanuel Silverstone, Theodore Caruso and James Roosevelt, in the order named. BOXOFFICE : : August 26, 1939 5