New York Clipper (Jun 1923)

6 THE NEW YORK CLIPPER June 6, 1923 RINGLING'S WIN BIG TAX CASE "GOOD WHL" ASSES SMENT OUT Estate of Ringlings Saves Pajrment of Big Inheritance Tax— Jolm fA. Kdly, Attorney, Files Big Brief in which He States That Circus "Good V/iSl" AmounU to Nothing The estate of Alfred T. and Henry Ringling, of circus fame, will be relieved of paying an inheritance tax of approxi- mately ^50,000 by the decision rendered last week -by the Board of Appeals and Re- view of the Inheritance Division of the Treasury Department which decided to eliminate entirely any consideration of the "good will" in levying the inheritance taxes on the above mentioned estate. The de- cision establishes a precedent for similar litigation that might arise in the future in show business and is the culmination of an extended legal battle led by John M. Kelly, attorney for the Ringling Brothers, who filed a brief so complete that six months was required to prepare it, and which amounts to a whole circus history. "Good Will," its correct definition as ap- plied to the transfer of property was the chief bone of contention, and attorney Kelly made the plea "that the qualities which a showman of value imparts to an enterprise, whether a theatre or circus, are intensely personal, become part of his in- dividuality and die with him. Good will is extremely valuable to the man who possesses it; I don't deny that. But un- less the transferee or buyer of that good will is equivalent of the original possessor, it isn't worth a dollar. Good will no mat- ter how valuable it may be, is something that cannot be transferred intact, and the Government tax is simply on the transfer of the property." The Kelly brief will go down in circus and show business history as the most com- plete record of the great amusement ever compiled and issued. It is work of which Mr. Kelly may well be pround. not only that it doubtless was responsible for the winning of the appeal to be relieved of the big inheritance tax but that it furnishes an imeresting and ac- curate history of the great American amusement industry. In the brief which Mr. Kelly has copyrighted and which will doubtless be put out in, booklet form he maintains that the good will of the circus amounts to little or nothing, because the fortunes of the circus depends upon the genius and foresight of the men who man- age it. It is a hazardous business, he says. "The circus passes completely but of existence," as far as place or locality b concerned when it moves off the lot. Good will could not attach to the tangible property of the drcus. It is merely an mcident of the movement of the circus. Good will can not attach to a performance because a circus program not only must vary but must undergo complete change in direct contrast to the establishment of the good will that attaches to business dealing in commodities and articles of trade. "It is special and unique. It is unlike any other enterprise. There is no other line of business that offers a true comparison. It is common knowledge that a railroat^ strike, embargo, quarantine, crop failure, and other contingencies that threaten the very life of the circus may affect but slight-. ly the theatre, amusement park or baseball that have a fixed location and are able to conduct advance sales and issue rain checks. "We cite in this connection the railroad strike of 19Z2 which \'trtually put several circtises out of business, lo like effect restricted transportation during the war, labor troubles dtu-ing the war and the re- cent quarantine during the spread of foot and mouth disease. The circus can issue no rain checks nor hold advance sales. If the day is lost all is lost that pertains to the given stand. "A ticnp for a week has often resulted inputting a show out of business. Every circus that goes oat makes its ap- peal for patronage on the claim of having something new—and consequemly untried. At best it is an cxperliiiciit— w much so that the history of circuses discloses an overwhelming majority of failures. "The principles of merchandising and trade developments upon which good will is built are completely reversed in the circus business. What is commonly ac- cepted as good will in the circus name of Ringlings is more correctly interpreted as conhdencc of the public in their profes- sional ability and skill to present excep- tional, clean, dependable entertainment. "The Ringling circus embodies the genius and personality of the Ringlings. It is their finesse in amusement creations and features; their judgment in selecting a program of entertainment; their sense of economy in building and their wisdom in routing the show tiat impart value to the institution. ''The alterations Ringlings make in a pro- gram of entertainment: what they reject: the' snap and action they develop in the acts presented; the harmony and "balance" among acts which make up a Ringling pro- gram. Freedom from all objectionable features that so often disintegrate out door amusements; their personality in preserv- ing the morale of the organization; the in- spiration in their leadership—all these in- tensely personal qualities constitute Ring- ling individuality and give value to the en- terprises. These qualities are not capable of transfer by sale, gift, or inheritance." Mr. Kelley argued that the good-will amounted to little or nothing, because the fortunes of the circus depended upon the genius and foresight of the men who man- aged it. He called the circus a hazardous business. "The grinding process of carrying a cir- cus about the country, of building a tented city every day, of tearing it down and transporting it at night, of being picpared to handle vast crowds in unfamiliar places 'twice daily, rain or shine.' decisively ancT unmistakably determine for every circus owner just now big he can build his show and operate it." "Telling of the growth of the Ringling circus from a small menagerie, Mr. Kelly said that for twenty-five years the brothers barely cleared expenses, but they kept on. Seeking to show the quality of personal genius that makes a circus a success. Mr. Kelly reviewed the history of scores of other circuses. The Gollmar Brothers, cousins of the Ringlings. started a show in 1891, he said, but were never able to build or operate more than a one-train circus. They avoided a failure liy retiring after twenty-six years of hard wbrkj he asserted. The Adam Forcpaugh show was never a profitable investment from the time its foimder died in 1890 until the Ringlings took it over it 1905. he said. The circus started by Willie Sells in 1900 and operated later under.various names was an example that good-will cannot be passed along as a great asset, said Mr. Kelly. "Fortunes have been lost in building cir- cuses." he concluded. "Fortunes have been lost in fruitless attempts to keep them go- ing. Name, good-will, reputation, have counted for little in the transfer of cir- cuses. In 100 years it has never figured as an item of any consequence. In a los- ing game the circus has struggled hard for self-preservation. Name and good-will have been mere incidents." BELASCO GOING TO COAST David Belasco will leave Friday for a three-month stay at Los Angeles. CaU where he will supervise the filming of "Tiger Rose" with Lenore Ulric. Melville and Stetaon Juniors have just returned from an Australian tour which consumed nine months. In their anxiety to return to America they can- celled thirty-six weeks. DRAMATISTS MEET MANAGERS Having met Equity officials and submit- ted a proposal to serve as a basis on which to reopen negotiations of mediation be- tween the Actors' Equity League and the Produdng Managers' Association, with a view of 'bringing about some settlement of the differences between the two organiza- tions which led to the breaking off of the conferences to form a new basic agreement between the two bodies, at a meeting held last Thursday a committee appointed by the Dramatists' Guild of the Authors' League will confer with a body of the Managers' at a meeting this afternoon (\Vednesday). Xone of the dramatists or Equity repre- sentatives who were present at the meeting would discuss what the proposal is. How- ever, it is understood that Equity is willing to negotiate with the managers again along the lines of this proposal. Should the managers look upon the proposition in the same light that the actors' organization are reported to have, it is likely that the difli- culties which are expected between the two organizations at the expiration of their five-year agreement in 1924 will be avoided. It is said that, should the managers re- fuse to listen to the proposition of the dramatists, the latter will probably join the ranks of union labor to protect their inter- ests. The dramatists claim that they will be forced to take this stand and "unionize" their plays, so as to protect their own in- terests, which might be menaced by the Equity shop. One of the committee of dramatists who attended the meeting with the Equity rep- resentatives stated this his committee stated in very_ plain terms where his organization stood in the matter. He said they in- formed the actors' representatives that they must have some guarantees from both the Equity and P. M. A. From Equity they will request that the latter guarantee that under no circum- stances will the organization attempt to say that a certain actor must be engaged for a certain role or that any actor that the dramatists select must not be engaged for a certain role. They also desire the Equity t oguarantce that it will not at- tempt to dictate, by forbidding actors to accept engagements, what kind of plays the dramatists shall write, whether or not they may be antagonistic to Equity's poli- cies. They will demand absolute freedom in the choice of the subjects and the writing and casting of all plays, says this man. MACK STARK and RUBY COWAN Maclc Stark and Ruby Cowan formed a part- nership about tbm years ago. called the Stark and Cowan, Inc. In that short space of titne ther bave put aoDsa not a few of the country's biggest song hits namely, ''Everybo d y's Buddy," "Wbat-cba Gonna Do When Theiv Ain't No Tazz," "Scan- dinavia." "Oogie, Oogie, .Wa Wa,'' and "Blue." Mack Stark, the financial head of the house, has been identi6ed with the music business for the past fiftcTo ^ears. having t>een connected in an otficial capacity with several other publisbers. Ruby Cowan handles the professional end of the business and a "better acquainted" man amonff the theatrical profession would be hard to 6nd. He is also a composer of note, rhis year Stark and Cowan, Inc., ate starting off like a whirlwind, with "Rose of The Rio Grande." "Wanita" and "In a Tent." AMUSEMENT STOCKS TRADING DULL Owing to the intervention of Decoration Day, but more to the fact that the group whichi had gone short on Famous and the other ktocks had succeeded in covering and were laying low the past week in the amusement stocks was marked with in- difference, trading being at low ebb with every indication that the market in these stocks would continue dull tmtil conditions had returned to something near normal. The .to-called pool operations are at a standstill with the possibility being that the next issue to show signs of activity is to be the Loew stock. According to reports a downtown firm is soon to issue a business analysis of this issue which will show that it is on a firm basis, practically back to its old dividend rate in the way of earnings. If this is so it should have a salutary effect on the stock, which would be a good buy at its present level. Orpheum, lately, has been just drifting with the tide, following the market trend but showing resistance to any great pres- sure. The group of insiders which were supposed to be rounding out their holdings have evidently completed what they set out to do, acquiring the stock at low levels but never buying in large enough quanti- ties to force an appreciable rise nor ever entering into a state of competitive bidding that would tend to force the price up. The new issue of Goldwyn was ad- mitted to listing last week and has gained yi a point in the week or so it has been traded in. It is now quoted at Z\'/i, amounting to a full point better than four times the price of the old issue at its Satur- day closing and yi point better than four times the old issue at its closing Monday. Inasmuch as the new stock is being issued at four shares of the old for one of the new the quotations would seem to indi- cate confidence in the issue and an idea that new financing and the Hearst affilia- tion will react beneficially. Famous, last week, opened at 78^ and at one time climbed to 81. closing the week at 79% with 15,500 shares sold for a gain of Vi on the week. Most of this gain was dropped on Monday of this week when the issue closed at 78^ after going as low as during the day. Only L200 shares were sold for the ^ loss. Goldwyn had a dull week, only 1,900 shares being sold for a loss of 'A. the issue opening at SVt, never going more than % above this point and closing at S%. On Monday of this week 700 shares were sold for a gain of the price being 2lyi. Locw's dropped % of a point during the week, 2.700 shares being sold, the price receding from its opening of 17'A to 17, at one time dropping slightly below to I6i<i. This was the price it closed at on Monday of this week with 500 shares be- ing sold, the loss ibcing % for the day. Orpheum suffered the biggest loss of the amusement stocks during the week, re- ceding ^ from its open of 18^ with only 1.800 shares in evidence, closing at 18. On Monday of this week a single trans- action of 100 shares was made at 17fj, a loss of 14- JUNGLE OWNER SENTENCED Kate Francis, Greenwich Village cabaret owner, who was convicted in Special Ses- sions for running a disorderly resort, filed an appeal, which automatically stays the execution of sentence and has been con- tinued on bail. Miss Francis's resort was known as "The Jungle" and was located at No. 9 Cornelia Street, Greenwich Village. RUTH ETTING Ruth Etting, whose picture appears on the front cover of this week's issue of the Clipfes is a new comer to the theatre world, a discovery that is attracting great attention. Miss Etting was rehearsing in a chorus when her voice and singing style attracted attention and she was immediately taken out and given a role. She scored an im- mediate nit and now in the Rainbo Re- vue at Rainbo Gardens in Chicago is scor- ing a hit of big proportions. Beautiful in face and an attractive man- ner, a fine voice and excellent singing style Miss Etting has a fine future.