Exhibitors Herald (1927)

20 EXHIBITORS HERALD October 22, 1927 Commission Studies ‘Six Points’ Violators Subject to Action by Commission Rules Laid Down by Conference Become Law for All If Board Indorses Them ( Washington Bureau of the Herald) WASHINGTON, Oct. 18. — The Federal Trade Commission today is faced with the task of determining whether the “six points” agreed upon at the New York conference last week adequately cover the question of block booking or whether the more detailed requirements of its order of last July against Paramount-Famous-Lasky are to be imposed upon the industry. Commissioner Abram F. Myers, who presided at the New York meeting, is credited with having performed his task in a masterly manner and to have made many friends for the commission among a group which heretofore has considered it an antagonizing element. Disappointed to some extent at the failure of the meeting to ban booking entirely, the commission nevertheless feels much good was accomplished in bringing the question out for open discussion, and believes, also, that the conference served to clear up some, at least, of the perplexing points. Will Get Report Soon The commission shortly will receive the report and recommendations of Commissioner Myers. It then will have to determine whether the conference accomplished its purpose, and whether the points there agreed upon can be accepted as a code of ethics for the film industry. If the code cannot rest on this foundation, the commission will have the Paramount decision before it and, upon receipt from that company of the report required by the order , showing how the company ivill comply with its provisions, will be able to decide what step next to take. The sixty-day extension granted in September will expire November 8. If the company reports it will not comply with the order or fails to file a report, the commission will decide whether the courts are to be asked to enforce its findings. If the sentiments expressed by the New York conference are accepted as a satisfactory code of ethics and Paramount expresses its intention of adhering to that code, no further action will be necessary with respect to the July decision. Although not yet generally realized by the industry, the rules laid down at the New York conference, if approved by the commission, will become the law for all, and those who refuse or fail to comply with their provisions will be subject to prosecution by the commission. Similar conferences had been held with more than 25 other industries. Trade rules adopted in conference by a substantial majority of an industry become the rule of conduct for the entire industry. Violations may be followed by the issuance of a complaint, as in other cases, investigations and hearings, and the issuance of a proper order. In these cases, however, the respondent is required to show, not that the practices complained of are not unfair, but that he has not violated the code drafted by his own industry, the fact that certain practices have been banned by an industry being accepted by the commission per se as unfair. How Conference Operates How the trade practice conference operates was explained at length by the Federal Trade Commission in its last report to Congress. “A trade practice conference provides a method of procedure whereby those engaged in an industry or business may formulate, under the direction or sanction of the commission, their own rules of business conduct,” it was stated. Here Are Other Resolutions Accepted ( Special to the Herald) NEW YORK, Oct. 18.— Among other resolutions, in addition to the major ones, on which spirited arguments were engaged in, but which finally were accepted by the commissioner were the following: fP'heras , under the rules governing the selection of Exhibitors Members of Boards of Arbitration in zones in which there is no actively operating exhibitor body , the exhibitors are selected or apointed by the Film Board of Trade , and Whereas^ under these conditions some Exhibitor Members may be placed on such Boards of Arbitration precluding the possibility of a fair and impartial arbitration reference , Therefore Be It Resolved that the selection of exhibitor members of Boards of Arbitration by Film Boards of Trade be declared an unfair trade practice , and Be It Further Resolved that , in zones where there is no actively operating exhibitor body , such members be appointed only by , and with the consent and approval of , the nearest exhibitor organization or by the M. P. T. O. A. RESOLVED, that the substitution by a producer or distributor, for any photoplay contracted for by any exhibitor as the photoplay of a specified star or of a specified director, or as based upon a specified story, book or play of any photoplay in which such specified star does not appear or which has not been directed by such specified director, or which is not based upon such specified story, book or play, as the case may be, unless with the consent of the exhibitor, is an unfair trade practice. * * * Resolved that the insertion of commercial advertising for which compensation is received, in motion picture productions leased to exhibitors as entertainment, is an unfair trade practice. * * * Resolved that the refusal of a distributor to lease a photoplay or photoplays to an exhibitor for exhibition within a reasonable time after its prior run, shall be' considered an unfair trade practice. * * * Resolved that the granting of protection with the leasing or licensing of a film over a theatre which is not in competition with the theatre so licensed is an unfair trade practice. * * * The practice of transferring title to a theatre without making an honest and sincere effort for the transfering at the same time of existing contracts, is an unfair trade practice. The purchasing of photoplays for a specific theatre which photoplays are used in other theatres uncontracted for , commonly known as bicycling , is an unfair trade practice. * * * Deliberately returning prints late, thus securing additional exhibition time without payment of rental therefor, or by reason of such delay, making it impossible to ship such film to the next customer who has it booked, is an unfair trade practice. * * * Resolved that the giving of any gratuity either by an exhibitor to a salesman, or a salesman to an exhibitor in exchange for advantages not otherwise procurable between buyer and seller either in relation to the sale or booking of motion pictures, is an unfair trade practice. * * * Resolved that the practice of contracting for pictures for one theatre and using service at an entirely different theatre than the one specified in the contract, is an unfair trade practice. * * * Resolved that failure on the part of the exhibitor to promptly report correctly the results of percentage bookings, is an unfair trade practice. * * * Resolved that the use of buying power for the purchase of more photoplays than an exhibitor can consume, in order to deprive a competing exhibitor of the opportunity of purchasing his supply of photoplays, whether it be an attempt to corner the market against such competing exhibitor, or whether it be with the thought of forcing a competing exhibitor out of business, or the compelling of such competing exhibitor to sell his theatre, is an unfair trade practice. Material Progress Made, Hays Says; Industry ys Stand on Problems Clear Will H. Hays, president of the M. P. P. D. A., said after the conference : “The result of the conference, of course, is a material progress. The industry’s position on several matters heretofore not understood by many is made definite and plain. “The provision for the modification of the sales contract by arbitration including the arbitration of all disputes under the contract and the endorsement of the industry’s purpose to promote commercial arbitration is of vast value. The motion picture industry could not stand the loss incident to the possible litigation involved in ten million contractual relations every year. “The pronouncement of the distributor’s policy in relation to block booking, agreed to unanimously by the exhibitors, is the complete assurance to the public that in its operation this sales policy shall not be misused and that any pictures which might possibly actually be offensive locally, by reason of any racial or religious content, will not be shown; and that at the same time there shall be no secession of the steady supply of good pictures including those especially desired by the discriminating public. And not the least accomplishment is the demonstration of constructive cooperation.”