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Wednesday, May 6, 1936
Page Three
THE LESSON FROM ST. LOUIS!
The battle of St. Louis has ended. That the conditions of the truce represent a startling victory for the plaintiffs and the Government, is of far less importance than the effect this case may have on the future conduct of the defendants and others in the industry who may be tempted to disregard the rights of the underdog.
It has been an expensive fight for the three defendant film companies. In acceding to the advice of mediator Sol Rosenblatt, they displayed much better judgment than in designing their plan to crush Fachon & Marco, because the latter dared challenge Warners' theatre monopoly in St. Louis. By settling out of court, they saved their companies another half million or so, which would have gone to lawyers. The million dollars reputedly spent by Warners, RKO and Paramount in fighting the case amounts to far more than they could possibly have netted from their scheme over a period of many, many years.
One of the grossest evils existent in the industry is the practice, among the theatre-owning majors, of "collaborating" to prevent independent exhibitors who compete with any of them from obtaining sufficient product with which to operate successfully.
This was the basis of the case against these three producer-exhibitors and it has been an expensive lesson for them to learn that sooner or later they are bound to run afoul of the antitrust laws.
The tenacity with which the Department of Justice pursued the case heartened the small exhibitors, many of whom suffer similar abuse from this "collaboration" practice. They are now hopeful that the Government will force a general correction of the discriminatory policies of the Big 5.
And, it might be well for these major producer-exhibitors to regard the termination of the St. Louis Case, not as a closed and forgotten book, but, as a warning that they must respect the rights of those outside their fold. It is common knowledge that the Department of Justice is convinced that shady and actual illegal acts are being committed in some quarters and these must be eliminated. One member of the Department recently remarked that "The film industry has been our most troublesome field for the past seven or eight years."
We join, with every right-thinking factor in film business, in urging the more powerful producers to readjust their methods to conform not merely with the outer rim of legality, but with a sound policy of equity for the little fellow, as well as for their own circle. It should be evident to them that, failing to heed this lesson, they may find that the St. Louis Case was merely a prelude to a broader, more drastic attack by the Government, the final outcome of which may mean their destruction.
MO WAX.