Harrison's Reports (1933)

Entered as second-class matter January 4, 1921, at the post office at New York, 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 29, 1933 No. 17 GET BACK OF THE SIROVICH RESOLUTION! Last week I sent the following appeal to Congress : “Lobbyists working for the interests of the moving picture producers are now in Washington exerting superhuman efforts to kill Resoltion H. 95, which has been introduced by Mr. Sirovich for the purpose of having a committee consisting of House members investigate the moving picture industry, with a view to finding out what has become of nearly two billion dollars the American public has invested in moving picture stocks and bonds, and to bring to light whatever irregularities in the handling of this money it may discover. “The reasons assigned by these lobbyists to justify their activities against this Resolution is their belief that an investigation at this time will do the industry harm rather than good in that it will frighten the bankers to such an extent that they will refuse to lend to the producers the necessary money to carry on production, with the result that the theatres will be compelled to shut down for lack of product. “As the representative of thousands of independent theatre owners who are in favor of an investigation, allow me to present to you some facts that will offset the assertions of these lobbyists. “Those of the bankers who have been financing some of the big film concerns will not be frightened by an investigation, for they have been frightened long ago because of the losses they have sustained as a result of the mismanagement, high salaries of stars as well as of executives, of waste and graft in tlie companies they have financed, compelling some of them to notify the producers whom they have been financing that there will be no more money. One banking group alone has put in more than one hundred million dollars, little of which it hopes to salvage. Other banking groups have had similar experiences. "An investigation, instead of doing harm, will do good, for there are millions of dollars of small investing corporations tliat will be poured into the industry as soon as the stranglehold of the trust is broken. And only a Congressional Committee can accomplish this, for it will uncover the graft that has sapped the very vitals of the industry and will drive all the incompetents and the dishonest executives away. As long as the present setup continues to rule it, there is no hope of salvation. “Information has leaked out to the effect that these lobbyists have been instructed to favor an investigation by the Federal Trade Commission in case they should learn that they cannot prevent the passage of the Resolution. Let me say to you that an investigation by this Commission will be a waste of good money and of efforts. Look at what has happened to the investigation of Famous Players-Lasky Corporation by this Commission, even though it spent more than one-half million dollars of the people’s money in collecting evidence over a period of time lasting nearly eight years. You may obtain all the facts from the files of the Federal Trade Commission. “In the meantime, the theatre-owning producers have instructed their theatre managers to telegraph to you and to have their friends telegraph, too, informing you that they do not want an investigation, and you. thinking that these protests are genuine, may be inclined to heed them. ill H. Hays, who has been head of the moving picture industry for more than eleven years, at a salary of $260,000 a year for at least seven years out of the eleven, does not want an investigation, for the Congressional Committee rnight inquire of the bankrupt companies why they are continuing to pay to the treasury of the Hays organisation one-half of one per cent of their gross receipts when the money people invested in their securities has been a total loss. Nor do the producers want it, for it might ask them what they have done with the money they received from the public for stocks and bonds that are now either worthless or practically so. I know of one case where $750,000 was paid by a film company for a piece of ground that could have been bought, according to real estate experts, for about $250,000. It is my belief, in fact, that the scandals, a Congressional Committee will uncover will be more sensational than the Tea Pot Dome scandals; and more cruel, for in the case of the Tea Pot Dome the one that had been defrauded was the United States Government, whereas the ones defrauded in the moving picture industry have been to a great extent widows and orphans. “The moving picture industry is corrupt. “Can it be saved? “Yes, of course ! But only by a major operation. “Let Congress, then, act as the surgeon !’’ In addition to the members of the House of Representatives, I sent copies also to every Senator and to every member of the President’s Cabinet. In the same envelope, I put in a copy of last week’s issue, which contains the open letter to Attorney General Cummings. It is possible that some of you are not acquainted with the details of the Sirovich Resolution (H. 95,) — what it aims to accomplish. The chief object of this resolution is to look into the reckless methods with which moving picture securities were financed, by which methods the public has been despoiled of nearly two billion dollars. Section 2 of the Resolution reads as follows : “The committee, or any duly authorized subcommittee therefore, is authorized and directed — (i) to sit and act at such times and places as may be necessary to hold hearings to conduct investigation and study of all matters relating to production, licensing, sale, distribution, financing, incorporation, commercial operations, banking, theatre leasing or ownership, realty, sound production, and all other related and interretated combinations, affiliations, and organizations of production, distribution, license, lease or sale and presentation or exhibition of the product of and by organizations of all character engaged in and/or associated or affiliated or financially or commercially interested in the motion and sonant pictures industry and of all matters and acts relating to or concerned with the issuance and/or sale or hypothecation of motion and sonant pictures industry securities of all forms by such organizations directly or through agents or other means, or by banking or security-selling organizations or their associates or affiliates ; . . . (.3) to investigate and inquire into the dissipation of the assets of the various companies in the payment of exhorbitant and unmerited salaries and other forms of compensation to executives, actors, directors, stage managers, and other officers and employees. . . .” You see from the foregoing that the language is broad enough to enable the committee to look into the unlawful and oppressive practice of the producer-distributors you have been complaining of, such as, block-booking, unreasonable protection, and purchasing all runs so as to shut off all product from a competitor in violation of the AntiTrust laws. But what should concern you more than anything else is the fact that the Resolution empowers the committee to make an exhaustive investigation of the building and acquisition of theatres by the producers. Certainly you realize the need of throwing a light upon the motives that prompted the producers to build theatres against independent exhibitors, and the methods they employed to accomplish their object. The introduction of this Resolution has already accomplished much good, for it has brought to the attention of Congress the lobbying methods of the Hays association. No {C ontinued on last page)