Exhibitors Herald (Jun-Dec 1917)

H B O R H R S3 Tax Laemmle Indicts Distributors for Absorption of 15c Reel President of Universal Charges That Companies Not Assessing Tax Must Make It Up in Some Other Way divers other CARL LAEMMLE. Pres. Universal Film Mfg. In an open letter which charges insincerity, hypocrisy, "camouflage" and crimes, Carl Laemmle. president of the Universal Film Manufacturing company, gives his unqualified views of the distribut o r s who have absorbed the film tax of 15 cents per reel. Mr. Laemmle in explaining the letter says it was called forth by a question put to him in writing by a western exhibitor who asked: "How can the exchanges which are not charging the war tax stay in business?" The president of Universal believes that the question so distinctly sums up the tax question from the producers' and distributors' standpoints that the answer should be read by all exhibitors instead of one. His letter follows: Must Raise Prices "In answer to your very natural question. 'How can the exchanges which are not charging the tax stay in business?' "Frankly, we do not know how they can do it In fact we do not believe for one instant that they can pay this tax themselves and avoid raising their prices at a later date. "It is more than probable, we believe, that they hope to pose as champions of the exhibitors and thus draw an amount of business away from us not only sufficient to cover the absorption of the taxes but to produce an additional profit for themselves. "If we were to pursue the course that they have adopted, all or most of the producing companies would have to go out of business and in all probability the companies you mention would not be any more likely to escape this result than any of the other companies. Tax Absorption Ruinous "No doubt we would have made ourselves great temporary heroes, in the eyes of many exhibitors, if we had not said anything about passing the tax along to the public through the theatres; but in the end it would have ruined the exhibitors by reason of the fact that it would have ruined the producers and thus shut off all sources of film supply for theatres. "All the producers combined cannot afford to pay a tax of $100,000 even. week. v. ie-.jier -.lie public believes it or not. Eut if such an amount is passed along to the public, the public will not even feel it. "Unfortunately, there is not another industry in the world ic which the tax has been levied in just the manner that it has been levied in the picture business. In all others, it is levied in such a Banner that it goes on to the public very directly and very quickly. In our case we are practically ■ placed in the position of having to beg the cooperation of exhibitors when as a matter of fact they should not only be willing but eager to give it m order to save themselves and the whole industry. Ask No Repeal "This company will not ask the government to repeal tbe tax law, no matter how unfair its pro visions may seem, because the United States needs the money and must have it. If the exhibitors feel that it should be repealed; if they can convince Congress that it should be repealed, well and good. That is none of our business. The exhibitors have as much right to run their affairs as the producers and exchanges have to run their own. But as long as the law is 4 law. it is our plain dutv to do the best we can to act as collectors for Uncle Sam. If we fail in this, we fail in all. "Common sense compels every thinking man to know that those companies not charging the tax must make it up in some other way. We don't pretend to know what that way will be. but we do know that the exhibitor cannot benefit by it in the end. "We could have handled the whole matter m quite a different way if we had chosen to sav nothing about the tax at all but simply and quietly advance prices all along the lines. But we chose to be perfectly frank about it and make no profit on the war tax. We figured, as nearly as we could, what the war tax would cost us and then passed it along to our customers, knowing that they in tarn would have to pass it along to the public. I might say, incidentally, that in figuring we gave ourselves by far the worst of it. As a result the amount we collect from the exhibitors cannot equal the amount we must pay to the government. Chose Above-Board Methods "'We chose the frank and open method lor the very simple reason that it seemed the honest thing to do. We could have employed camouflage or we could have indulged in mock heroics to fool our customers, but we took it for granted they would prefer open and above-board treatment. We took it for granted that they knew that no tax on any producer in any line of business is actually absorbed by the producer (unless he is making an exorbitant profit;, but that every single penny of it, _ and some times more, is passed on to the ultimate consumer, the public Sometimes it is passed directly; at other times indirectly — but it always goes down the line in the end. "Not a single objection was made to our method of collecting the tax until a few professional agitators stirred up a cloud of dust to blind the exhibitors and make them think we were abusing them. This is unfortunate, but it does not influence us to change our attitude, because we made sure we were doing the right thing before we went ahead." The distributors who have absorbed the tax and are. therefore, the target of Mr. Laemmle's shot, are the Mutual Film Corporation. Triangle Distributing Corporation. Hoffman-Foursquare, General Film Co., Omaha Film Exchange (.State Rights) Art Dramas, Standard Film Corporation, U. S. Exhibitors' Booking Corporation. Jaxon Film Corporation. Wholesome Films Corporation and the Globe Feature Film Corporation. Robert Warwick Now a Captain in Uncle Sam's Army Among the motion picture actors who have recently won commissions at training camps is Robert Warwick. "Mr. Warwick was promoted to captain at the Officers' Training Camp at Plattsburg. N. Y., and is now in Xew York on a furlough. CAPT. ROBERT WARWICK When he enlisted Mr. Warwick was under contract to star in a production for a company bearing his name, as well as to appear on the legitimate stage under the A. H. Woods management. Mr. Warwick will report to Camp Dix, X. Y_ on December 15. Shamrock Director Aids in Beach Film P. S. McGeeney. director of the Shamrock Photoplay Corporation, left San Jose, Tex., this week for Eagle Pass, where he will assist Director Powell of the Rex Beach Pictures Company to stage the "Heart of the Sunset." now being filmed there. The picture will be finished at the Shamrock studios in San Jose. Anna Q. Xillson and Herbert Hayes star in the photoplay. THREE SCENES FROM "SHIRLEY KAYE CLARA KIMBALL YOUNG IN HER NEWEST VEHICLE. TO BE IED UNDER THE SELECT PICTURES-STAR SERIES.