Harrison's Reports (1933)

64 HARRISON’S REPORTS declared the control of Loew’s, Inc., by Fox Film Corporation illegal. By the first part of July, 1931, some one must have realized that this position was legally untenable and a supplemental consent decree was entered instead. The Court appointed three trustees (the former U. S. Attorney General Gregory, former Judge Hazel, and Thomas Nelson Perkins, who was a member of the firm of Lee Higginson and Co.) to guard against any further violations of the Anti-Trust Laws. For grotesque legal absurdities, these decrees are, in the opinion of students of law, unknown in the history of the Anti-Trust Laws, even under other Republican administrations. According to the New York Times of April 2, 1933, further changes in the status of the Loew stock control was imminent. The names of the following companies were given as being interested in the Loew stock ; Chase Securities Corporation, Western Electric Company, Hayden Stone & Co., Dillon Reid & Co., The Atlas Corporation, Chemical Bank & Trust Co., Manufacturers Trust Co., First National Old Colony Corporation, Banca-America Blair Corporation, U. S. Securities Corporation, and Philadelphia National Bank. 4. U. S. vs. WARNER BROS., INC.: An equity suit to set aside the stock control of First National Pictures, Inc., by Warner Bros, as a violation of Section 7 of the Clayton Act has been postponed regularly ever since it was filed November 25, 1929. In the meantime the two companies have merged their physical properties without an interference by the Department of Justice. 5. U. S. vs. UNITED THEATRE CIRCUIT: An equity suit brought recently by the Department of Justice against this company under the Sherman Act, involving the overbuying of pictures and the imposition of “unreasonable and discriminatory protection” against the independent theatre owner competitors, has been allowed to lapse ; no effort has so far been made to prosecute it to a conclusion. 6. U. S. vs. METRO-GOLDWYN-MAYER, etal: Criminal information filed in the Federal Court, in Chicago, about March 27, 1928, against Metro-Goldwyn-Mayer and most of the other distributors, meml)ers of the Hays association, charging criminal conspiracy to withhold pictures from all Chicago independent theatres, forcing such theatres to shut down, even though these had valid contracts for such pictures, came to naught. No one seems to know why the Department had brought that suit, for the offense had been committed one year previously to the filing of the suit ; it had arisen out of labor dispute between a producer circuit and the Operators’ Union, in which the film distributors, in order to force the Union to come to terms, ordered that all film be withheld from all theatres, so that the theatres, unable to operate, would shut down and thus penalize the operators by throwing them out of work. In 1928 there was much talk among the independent theatre owners about appealing to Congress for an investigation of the motion picture industry, and the supposition is that the Department of Justice, fearing criticism at the hands of the Congressional Committee that would naturally be appointed had an appropriate resolution been adopted by either House, took this action. But when the agitation for an investigation subsided, all efforts of the Department officials to carry the suit to an end were dropped. Although this did not happen during the Hoover administration, it serves to prove the supine policy of the Department of Justice under Republican administrations. 7. FEDERAL TRADE COMMISSION vs. FAMOUS PLAYERS-LASKY CORPORATION: Wlien a proceeding involving the validity of an order of the Federal Trade Commission against “block-booking” resulted in a decision against the Commission in the Circuit Court of Appeals, no appeal was taken to the Supreme Court. A close investigation of this case would, I am sure, prove astounding to you. For several years the government carried on an investigation against Famous Players-Lasky, for its monopolistic activities, through Block-Booking, acquisition of theatres, and other means, spending hundreds of thousands of dollars collecting evidence. During the time of this investigation, the political complexion of the Federal Trade Commission underwent many and varied changes. When the case at last came to trial, it had been so emasculated by Commission Counsel that there were no issues left to be tried, and on April 5, 1932, the Circuit Court of Appeals dismissed the order of the Federal Trade Commis April 22, 1933 sion. Thus more than one-half millions of dollars of the people’s money were wasted and several years’ efforts sacrificed. The articles I am sending you by mail may help you understand some of the facts more clearly. It is hardly necessary for me to enumerate other cases to prove to you that from the time Will H. Hays became the president of the producers’ association not an effective step was taken by the Department of Justice to put an end to the Anti-Trust Law violations in the motion picture industry. Complaints made by theatre owners from every state of the Union to this Department that the producer theatres made it a practice of buying more pictures than they needed so as to shut off product from the independent theatre owners, competitors of theirs, their object being to force them either to shut down their theatres or to sell them to one of the producers at a loss, proved of no avail ; the political immunity the producers enjoyed under the Republican administrations, particularly under the administration of Hoover, was like a stone wall. So discouraged were the theatre owners that through their national organization they sought to end this system of “peonage” by a Congressional investigation as well as by the enactment of proper laws. They introduced in Congress two measures for the purpose. But even in this they were unsuccessful, for the same hidden forces neutralized their efforts to obtain j ustice. They have not pressed these measures since March 4 because, feeling confident that President Roosevelt will come to their aid in their just claims, they have thought it best to give him time to organize himself before seeking his aid. During the past four years the producers have been steadily tightening the rope about theatre owners’ throats. The theatre owners have brought actions in their own behalf but the trust usually did not contest them, or, if defeated, did not appeal, so that no authoritative rulings have been had. The Youngclaus case in the U. S. District Court in Nebraska is a case in point. The files of the Department will disclose the facts about this case. Similar proceedings are pending in Massachusetts, New Jersey, Minnesota and many other places. But only the Attorney General, proceeding in the name of the United States, can get general relief. Therefore, the independent theatre owners are absolutely dependent on you. If you or some one in whom you have confidence will examine the files of the Department during the past four years 3’ou will find numerous complaints of clear violation of the Sherman Law which were either completely ignored or else resolved on representations made by agents of the producers or attorneys of the Hays Association. As an experienced politician you, of course, know that on a change in administration the employees who have been most cooperative with outside interests always try to insinuate themselves into the good graces of the new officials. I know that the theatre owners can rely on 3’ou to ferret out the channels through which the influence of the motion picture trust has reached into the Department of Justice, with all their ramifications, and rest assured that the independent theatre owners are ready to cooperate with 3’OU through their national organization to the end that justice against oppression and tyranny may be obtained. Very sincerely yours, P. S. HARRISON. OUR BRITISH PICTURE BRETHREN RIDING FOR A FALL For a long time this paper held the hope that the British producers, having learned a great deal about picture production since sound came, would give the American producers a stiff race. But judging by the late releases that have come from England I can say that I have been utterly disappointed. There is no originality in them and they bear the marks of aping the American productions. This is noticeable particularly in the matter of Aoilgarity. I saw a British Gaumont picture (“After the Ball”) recently and all I can say is that it is vying with the dirtiest talk in American pictures. The British seem to be trying to outdo the American producers in vulgarity. It is too bad that the British producers are following the footsteps of the American producers. They had a great opportunity of striking out for themselves and putting production on a high level, particularly since graft, as I have been informed reliably, is unknown at the studios in England : unfortunately they have turned out imitators. And the best one can sa3' about imitations is that they are imilations.