Harrison's Reports (1937)

4 January 2, 1937 conduct his business, to safeguard his investments, to make a fair profit from his labors, are to the tyrannical monopolists but empty phrases in their mad, heedless pursuit of greater wealth and power. Were it otherwise, there would have been no occasion for President Roosevelt's utterance : "Against economic tyranny such as this, the citizen could only appeal to the organized power of Government." In the motion picture industry, as in every other industry, if those possessing the greater power, the greater influence, the greater wealth, should recognize their weaker, their smaller brothers ; if they should hold commercial and economic communion with them, should seek not to crush them but to trade with them, we would have little need to "appeal to the organized power of Government." Too long, however, have honest attempts at voluntary economic reforms proved futile ; too long have leaders of liberal business movements been cajoled, bought off or crushed by the powerful economic royalists ; too long have sham leaders of the down-trodden "forgotten man," either through ignorance or design, diverted him from his true path of self-liberation. Were the independent business man, the independent exhibitor, able to cope with his oppressors merely through his own faculties and his own resources, he would never appeal to the Government for aid. But in the struggle for existence he can no more hope to survive against the giant monsters of economic power than can a domesticated cat in a struggle with a mountain lion. And so the independent exhibitor, striving to retain his existence in a monopolistic industry, turns hopefully to Franklin D. Roosevelt, the great prophet of economic liberty and of business equality. Thus it is that his preelection utterances become of momentous import as we approach the dawn of his second administration. In them we find hope — inspiring promises of relief from oppression and freedom from oppressors. Will these promises be performed? To those who have not grown hopelessly cynical, the experience of past performance indicates a most emphatically affirmative answer. And a more positive portent is to be found in the fact that Mr. Roosevelt, about to enter his second term, did not wait even for his inauguration to begin activities. His Attorney General has already started upon the serious business of performing some of the Administration's promises : In the Federal District Court of Texas, the Government has filed suit against fifteen defendants, including six major distributors, alleging restraint of trade and commerce, and seeking to enjoin the defendants from carrying out contracts alleged to be in violation of the antitrust laws, contracts that attempt to regulate the admission prices of subsequent run theatres and to prohibit double features. No noise ! No advance publicity ! Just action ! It seems as if the era of freedom from economic tyranny is close at hand ; the day is not distant when you will have the "equal opportunity" President Roosevelt has promised you along with every small business man, as much in the "market place" as in the "polling place." Cheer up ! ABOUT THE OPERATION OF THEATRES BY DISTRIBUTOR EMPLOYEES Distributors whose employees are operating theatres should try to find out whether they are receiving enough revenue from their films or not. And so should other distributors, whose films are shown in those theatres. They should make comparisons with the prices they could obtain from the competitive theatres. Several years ago I undertook to force three employees of three different distributors to give up the theatre they were operating in competition with independent exhibitors. I went to the home office of one distributor and requested the proper official to compare the prices paid by that theatre before its employee, in association with the other two distributor employees, took it over and after it was taken over by them, and it was found out that in almost every case the distributor employees were paying less for the pictures, not only of their own companies but also for those of the other companies, whose product they had contracted for. An additional reason, and a most important one, why the home offices should compel their employees to give up the operation of theatres, if any of them are mixed up in theatre enterprises, is the detrimental effect this has upon their other employees : when they know that one of their group is operating a theatre and is making a great deal of money from it, they become demoralized; they want to make money on the side themselves, and spend a considerable part of their time looking for a theatre lease, instead of attending to the business of their company. This week two letters came to this office from distributor executives to whom information as to theatre operating activities of an employee or so of theirs was submitted : from Mr. W. F. Rogers, of Metro, and from Jimmy Grainger's assistant, F. J. A. McCarthy, of Universal. The following is the letter that was sent to the home office by Joe Kauffman, Universal manager in Pittsburgh : "In January of 1933, my father's business, a general store, was destroyed by fire, leaving my father and mother, two brothers and a sister without any means of support. "At about that time, my attention was directed to the fact that the lease for the Brookline Theatre was available. Upon further investigation, I found that it was possible to secure this lease, and did so in behalf of my family. They not having any experience in the show business, I engaged an individual by the name of Dave Brown as Manager, who did the buying and booking and stayed with my two brothers until they had learned enough about the business to operate this little theatre. Of course I helped them with suggestions and advice to the best of my ability. "The theatre at the present time is operated by my brother, M. S. Kauffman, and I am in no way connected with it, nor do I participate in any of the profits." Far be it from me to condemn so praiseworthy an act as that of a person taking care of his parents and of his brothers, either by direct support or by setting them up in business ; I have a personal reason to admire such men. But it is peculiar that Mr. Kauffman should have selected a theatre business to put his father and brothers into, when they knew nothing about operating a theatre, and when he knows how much experience theatre-operating requires. Wouldn't it have been more logical if Mr. Kauffman had leased a place for a general store for them, a business they knew how to conduct ? Mr. McCarthy informs this office also of the fact that, upon close investigation, he found out that Frank Mantzke, salesman of theirs in the Minneapolis territory, is "in no way connected with the theatre in Lakeville." Six months prior to his association with Universal, he tells me, Frank had helped his brother-in-law about the theatre, arranging his books, etc. Mr. Rodgers has written me to the effect that Bob Workman, manager of the MGM office in the Minneapolis zone, denies that he has an interest in the theatre at Crafton, N. D., and that Mr. Workman has no knowledge whatsoever that their Mr. Clatworthy is interested in a theatre at Walker, Minnesota. This has been corroborated by Mr. Saunders, of the home office, who has made a personal investigation of the matter on the spot. MGM is definitely opposed to the operation of theatres by their employees in the distribution department. A WORTHY NEW YEAR PLEDGE The following is a pledge every indepenedent theatre owner should take, if he is, of course, desirous of insuring his income from his theatre : "I will send to Mr. James Ritter, treasurer of the Exhibitors Defense Committee of Allied States Association of Motion Picture Exhibitors, Rialto Theatre, Detroit, Mich., a minimum sum of money representing ten cents a seat in my theatre or theatres, to be used by the Defense Committee in insuring legislation in my state as well as in every other state possible, to compel the producer-distributors to give up the operation of theatres, which act is contrary to the welfare of the small business man in that the manufacturer competes with his own customers ; "I will induce the organization to which I belong to invite Messrs. W. A. Steffes and H. M. Richey to make a personal appeal to all the members to contribute to the Defense Fund a minimum of ten cents per seat for every seat they have in their theatres, to be paid either at once or in ten equal monthly installments ; "I shall do all there is in my power to assist in any way I can the members of the Defense Committee in their effort to pass legislation in my state separating exhibition from production-distribution, and other legislation designed to protect the small men from the ravages of big business."