Harrison's Reports (1933)

52 HARRISON’S REPORTS the Department of Justice took no subsequent action against them whatever. At two different times since then has the Government brought suit against the members of the Hays organization on the ground of having violated the same Act, but each time it allowed them to escape punishment by pleading guilty and asking for a consent decree, a legal procedure that makes it impossible for aggrieved persons to use it as evidence against them. In the one case, that of United States Government vs. FoxWest Coast et al, the defendants were again found guilty of having violated the court order ; yet no action was taken against them by the Department of Justice, even though the Sherman Act contains penal features. 1 do not know how much Hays had to do with this impunity of the members of his organization, or if he had anything to do with it at all ; but, having thought these facts significant, I felt that you and the world should know them. Mr. Hays came into this industry when it was flourishing ; it is now nothing but a shell of its former self ; it is a corpse. It has been brought to this condition by extravagance, waste, high salaries, negligence, and ignorance on the part of the heads of most film companies. Three of them had run a race for several years each trying to outdo the other as to the number of theatres it could acquire. The methods they used to browbeat the exhibitors into selling their theatres are too well known in the motion picture industry, but hardly known among the public that invested its money in moving picture enterprises. No doubt the public invested its hard-earned money out of a belief that this ex-Cabinet minister, this steward, this man who had been painted as a Czar, would see to it that their investments were protected. He could not ; for he had nothing to do with the business affairs of the members of his organization. On the other hand, the members of his organization, perhaps feeling sure that they had the political protection of this ex-Cabinet minister, went to the limit in spending money of the investors, defying even the regulations of the United States Government. One of them has admitted it — William Fox, — in his book, which has been written by Upton Sinclair ; He states that, when he acquired the 400,000 shares of Mrs. Loew, he was told by the Department of Justice that he must not acquire control. And yet he, at the demand of the bankers, acquired control by buying the required additional shares in the names of relatives of his. And now we come to the current receiverships in the motion picture industry. You will notice that every one of the big receiverships is being handled, in court and out of court, by persons of his political party. Charles Hilles, the Republican leader of New York State, is receiver (or has been for some time,) for Paramount. The firm of William Donovan, defeated Republican candidate for the Governorship of New York State, has been engaged as attorneys for the receivers. Every “bone,” in fact, is thrown at Republicans, perhaps in payment for past services. Has Mr. Hays had anything to do with these acts? I do not know; perhaps a Congressional investigation could find out. The only thing I do know is that he recommended Hilles, who knows very little about the picture industry, to the Court as a suitable receiver for Paramount. My dear Senator Harrison, let me remind you that millions of dollars invested in moving picture enterprises by the American people have been lost by mismanagement, extravagance and waste ; and whatever is left is in danger of being lost on account of lack of knowledge of the motion picture business by receivers whose only qualification seems to be the fact that they are Republicans. Nothing but a sweeping investigation could salvage something for the investors. Nothing but such an investigation could disclose how much loot the bankers got away with. The independent theatre owners expect much from the Democratic administration ; they hope that it will correct the abuses that have wrecked the motion picture industry. And they are looking to you to champion their cause, because they consider you one of their staunch friends. Can you fail them? Very sincerely yours, P. S. Harrison. OH, BOY! WHAT AN ANTI-BLOCK BOOKING BILL THAT OF NEW MEXICO! I have just received a copy of the Rlock-Rooking Rill that was passed by the legislature of New Mexico. I have not had time to study it — I just went over it cur.sorily ; but what I saw in the bill is enough to throw April 1, 1933 cheer into the heart of every exhibitor, for there is no doubt in my mind that this bill will influence the legislatures of other states to enact similar legislation when introduced by you. Whoever drafted the bill certainly knew his business ; he has not left anything to chance. It prevents the distributors from selling their product to their favorite customers or to their own theatres, but provides for a fair allocation of given runs of product among all those who use product of such runs. It makes the paying of money secretly, or of giving rebates, or rewards, unlawful, and stipulates that copies of contracts or of franchises shall be filed with the Corporate Commission. It also provides that, in the event the courts declared any part of the law illegal, the other parts shall remain legal, and consequently binding upon the parties to such contract. Penalties are provided for in the event of violation of the Act, in the form of imprisonment, or of a stiff fine, or of both. The law will be discussed in full detail in a forthcoming issue. The comical part of it is, according to Commissioner Myers, the fact that the Hays forces were sure the Governor of New Mexico would not sign it on the grounds of unconstitutionality, and were projecting out their fearless chests ; the telegram announcing that the bill had been signed by the Governor was received while they were yet in session discussing it. I fear that it is too late to introduce a similar bill in some of the States, but there may be a chance of introducing it in the legislatures of some of them before they adjourn. If so, write or telegraph to the Attorney-General of the State of New Mexico, at Santa Fe, for a copy. This incident again proves one thing, that no matter how sure are the producers as to their ability to forestall unpleasant legislation, something turns up unexpectedly to upset their plans, giving them a jolt. They know that “protection” and product control are detrimental, not only to the interests of the exhibitors against whom such weapons are employed, but also to those of the entire industry. They know that it is selfish to want to control the entire first-run product ; they know it is wrong, not only for the independent exhibitor, but also for the public, for them to keep the product away from their competitors for an unreasonable length of time ; they are fully conscious of the fact that it is unfair to refuse an exhibitor the right to choose the type of pictures that suit his customers best, compelling him to show whatever filth the warped minds of their production forces see fit to produce. And yet they will not correct these abuses. The result is that the exhibitors, in desperation, appeal to the lawmaking bodies for help. If they are not successful the first time, they continue their efforts, until they at last succeed, as it has happened with the New Mexico exhibitors, and as it is bound to happen with exhibitors of most of the other states. If it were possible to inculcate into the minds of the producers the fact that nothing can endure unless it is founded on justice and fair play, there would be no difficulty for us to convince them that it is better for their own interest to grant these demands. Unfortunately this cannot be done. Consequently we must not relax our efforts at having Congress pass a law for the purpose of bringing about relief. Bill S. 3770, knowm better as the Brookhart bill, is now dead, but a new bill will soon be introduced in Congress. When it is, every one of you should work for it. Remember that a new administration is in power now. And the party this administration represents looks at your problems with a sympathetic eye. PARAMOUNT AND RAFT SETTLE DIFFERENCES George Raft, who was in New York last week, has settled his trouble with Paramount and is on his way to the Coast to resume his work in Paramount pictures. He told me that he is going back at the same salary as his contract provides. But he will not take part in “The Stori' of Temple Drake.” If the aggressive editorial of this paper in support of Mr. Raft has helped. I am happy. But there is no question that it created considerable discussion in the daily press. The last clipping I received was from the Columbus Cittrra. Mr. William S. Cunningham, the staff writer, wrote a column condemning the production of this novel. This paper hopes that the producers will be a little more careful in the selection of story material. Stories dealing with degenerate characters should be avoided because, no matter how much the plot is altered, tlie stench cannot be removed.