Harrison's Reports (1933)

Entered as second-class matter January 4, 1921, at the post ofHce at New Tork, New York, under the act of March 3, 1879. Harrison’S Reports Yearly Subscription Rates: United States $15.00 U. S. Insular Possessions. 16.50 Canada 16.50 Mexico, Cuba, Spain 16.50 Great Britain 16.00 Australia, New Zealand, India 17.50 35c a Copy 1440 BROADWAY New York, N. Y. A Motion Picture Reviewing Service Devoted Chiefly to the Interests of the Exhibitors Its Editorial Policy: No Problem Too Big for Its Editorial Columns, if It is to Benefit the Exhibitor. Published Weekly by P. S. HARRISON Editor and Publisher Established July 1, 1919 PEnnsylvania 6-6379 Cable Address : Harreports (Bentley Code) A REVIEWING SERVICE FREE FROM THE INFLUENCE OF FILM ADVERTISING Vol. XV SATURDAY, APRIL 15, 1933 No. 15 The Block-Booking Act of We have to take our hats ofif to the New Mexico exhibitors ; they have stolen a march on us : while we were dreaming and planning how, where and when we should introduce a bill outlawing block-booking and protection, they introduced one ; and while the Hays forces were puffing big black cigars, sure in the belief that the Governor of the State of New Mexico would not sign it on grounds of unconstitutionality, a telegram arrived informing them that the Governor had signed the bill making it a law. The introduction of the .'^ct reads as follows: “AN ACT “To Prevent Monopolies, Unfair Combinations, Restraint of Trade, Favoritism, Discrimination and Preferences in the Sale, Leasing or Distribution of Motion Pictures, and to place all Competitive Exhibitors of Motion Pictures on an Ekjual Basis in the right to Purchase or otherwise acquire the right to exhibit Motion Pictures, and generally present and prohibit Unfair and Unjust Contracts, Leases and other Agreements of every kind and nature between Producers, Distributors and Exhibitors of Motion Pictures, and Prescribing Procedure and Methods for carrying the purposes of this Act into effect, and providing penalties for Violation of this Act.” Section i defines the different terms, such as Exhibitor, Distributor, Protection, Franchise, and the like. Section 2 explains the purpose of the Act. Section 3 makes illegal every contract combination or monopoly of any kind the object of which is to prevent, restrict, prohibit or interfere with any competitive exhibitor from obtaining his share of the product of any producer and/or distributor. Section 4 prohibits any exhibitor from buying more pictures than he can show. It provides also that all contracts must be in writing, sworn to before a person authorized to administer an oath, and that a copy shall be filed with the office of the Corporation Commission of the State of New Mexico. Section 5 directs that all sellers of films shall “allot, divide or distribute their product in proportion to the kind and number of theatres in a town or city” ; first-run pictures among first-run exhibitors, and second-run pictures among second-run exhibitors (first and second-run of pictures and of exhibitors is defined in Section i) ; that the division shall be made by permitting each competitive theatre of equal run to select a picture alternately. In the event a competitive theatre does not wish to take advantage of its rights the seller of the pictures must obtain a written waiver from tbe owner. In such a case, his proportion of pictures shall be divided among the remaining competitive theatres. If the exhibitor failed to sign a waiver the seller is empowered to appeal to the Corporation Commission for permission to allot his pictures without a waiver. The appeal shall be determined by the Commission, with right of appeal to the District Court. Section 6 provides that the seller of film, whenever he announces a group of pictures, either made or to be made, shall file such announcement with the Commission and he shall announce the pictures to all exhibitors simultaneously. The pictures offered for sale shall be “marked” for identification and shall be classified in “A” and “B” groups, in accordance with their box-office value. If any changes are made, the Commission must be notified in advance. The playing arrangements shall be the same for all exhibitors of a similar class. Section 7 provides that unless the contract is revoked by the exhibitor or disapproved by the distributor within the State of New Mexico twenty days from the date of signing, it shall become binding. Section 8 makes unlawful the secret payment of rewards, or the refund or rebate of money paid for pictures by a competitive exhibitor. Section 9 makes unlawful the purchase of film for any longer period than one year. This provision excludes cases where pictures were contracted for prior to the adoption of this Act. In the cases of Franchises, their limit is made one year from the day the act went into effect. But parties to such contracts or franchises must file a copy within thirty days after the Act goes into effect. Section 10 provides that those competitive exhibitors who have contracts or franchises for pictures for a period longer than one year at the time this Act went into effect shall not take part in the alternate selecting of pictures with other competitive exhibitors until the exhibitors who haven’t such contracts or franchises have acquired an equal number of pictures. Section ii provides that producer controlled exhibitors showing the pictures made by their own company shall not take part in the drawing until after each of the other competitive exhibitors have acquired an equal number of pictures. Section 13 stipulates that a date shall be set for the alternate selection to be made in the city where such competition exists. Section 15 holds accountable any producer-distributor who misrepresents the merit or the box-office value of a picture. Section 18 makes the Chairman of the Corporation Commission the legal representative of the seller of film in New Mexico, upon whom legal papers in an action may be served. Section 23 provides that, in the event one or more sections of this Act were declared by the courst unconstitutional, the remaining sections shall remain binding. * ♦ * When the passage of this Act became known, the distributors were naturally disturbed. I do not know whether they held any meetings to discuss it and to determine what concerted measures they should take. I believe that, if such meetings were held, a decision was taken not to act concertedly, lest they be penalized by the courts. It has now become known that Metro-Goldwyn-Mayer has obtained an injunction against the law on the ground that its provisions attempt — (a) To occupy a field already preempted by the antitrust acts of the United States; (b) to fix purposes and to determine methods of conducting business not affected with the public interest; (c) to regulate and control a monopoly granted by the copyright laws of the United State. . . ; (d) to regulate interstate commerce and to impose burdens and restrictions thereon. ... ; (e) to regulate a business not affected with the public interest. . . . Many other reasons are given in subsequent articles of the complaint. What the outcome will be it is hard to predict. The provisions of the law are too good to make an exhibitor hope that he will enjoy them by a favorable verdict of the higher courts. But whether the courts sustain this law or not, the effect of its enactment in one state will be to encourage exhibitors in other states, to seek a remedy of the industry evils by legislation. Whatever the shortcomings of this Act may be the exhibitors will naturally note them after the courts render their decision, and will try to avoid (Continued on last page)