Harrison's Reports (1945)

IN TWO SECTIONS— SECTION ONE Entered as second-class matter January 4, 1921, at the post office at New York, New York, under the act of March 3, 1875. 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 15.75 Australia, New Zealand, India, Europe, Asia .... 17.50 35c a Copy 1270 SIXTH AVENUE Room 1812 New York 20, N.Y. A Motion Picture Reviewing Service Devoted Chiefly to the Interests of the Exhibitors Published Weekly by Harrison's Reports, Inc., Publisher P. S. HARRISON, Editor Established July 1, 1919 Its Editorial Policy: No Problem Too Big for Its Editorial Columns, if It is to Benefit the Exhibitor. Circle 7-4622 A REVIEWING SERVICE FREE FROM THE INFLUENCE OF FILM ADVERTISING Vol. XXVII SATURDAY, JULY 7, 1945 No. 27 DIMINISHING RETURNS An examination of the reports by experts in the financial sections of the daily newspapers leaves one convinced fully that the nation has passed the peak of its wartime prosperity, and that from now on busi' ness revenues will be on the decline. These reports are substantiated in the motion picture industry by the downward trend of box-office receipts throughout the country. In fact, only this week, the State Treasurer of Ohio released figures showing that motion picture theatres in the state of Ohio, during the first five months of 1945, as compared with the first five months of last year, suffered a decrease in attendance of sixteen per cent. The main factor generally claimed to have caused this falling off of box-office receipts is, of course, the steady rise in unemployment pending the reconversion of war industries to peacetime production. Among other factors that are claimed to have had an effect on the box-office are the exodus of transient workers from towns whose populations had swelled abnormally; the reduced earnings of those still employed, causing them to become thrifty and to cut down on their theatre attendance; and the poor quality of many pictures, which is driving patrons away from the theatres. While each of these factors has undoubtedly had its share in causing a decline in patronage, a still more powerful one, in the opinion of this writer, is yet to come. How soon and to what extent is unpredictable, but it deserves the careful study of the thoughtful exhibitor. The factor I speak of is a reaction to natural causes, such as we experienced after World War I, when the cost of living, like water, sought its own level. During that war, particularly in the last years of it, the shortage of labor sent wages skyward, and the manufacturers and retailers, taking advantage of the public's bulging pocketbook, charged unheard .of prices for articles, not only of luxury, but also of necessity. As a result, the cost of living rose to an unprecedented high, putting labor in a position to demand still higher wages. Everybody's earning capacity was abnormal, and everybody spent money lavishly. People lived in a fool's paradise with no thought given to the future. With the end of the war, and with the cutbacks in war contracts that followed, the economic state of the nation began a downward trend to normalcy. The army of unemployed increased constantly, and labor fought to maintain the high wages they had been enjoying. The manufacturers, however, faced with selling products to a people that had become thrift conscious, could not pay such high wages and, rather than suffer a possible loss, shut down their plants until such a time as labor saw fit to accept a wage that made it possible for them to manufacture products at a cost in conformity with the public's ability to buy. While this process of readjustment went on, the country suffered a business slump, which in turn affected the motion picture business. Today we find ourselves in the midst of an economic transition unprecedented in the history of the nation and of the motion picture business. I say unprecedented because, unlike the period that followed World War I, when the country laid down its arms and converted from a wartime economy to a peacetime economy, the present day finds the nation in a transition period that might be called one of half peace and half war. Because our country has never undergone such a transition period, the way ahead is uncharted, and even the best business experts cannot predict just what the future holds, for the progress of our war with Japan is the decisive factor in any prediction; a lengthy war, with its requirement of vast supplies will hold the national economy at a level high above normal, while a sudden collapse of Japan, which is quite possible in view of the tremendous pressure now bearing down on her, will jolt the national economy seriously, though in all probability temporarily, pending total reconversion to civilian production. I do not believe that the transition period through which we are now passing is going to result in a serious business slump, for, even though unemployment may be on the rise, most people of moderate means have saved sufficient money to tide them over until the wheels of civilian production begin to turn, provided, of course, that their layoffs are not unduly long. But I do believe that, like the period following the last war, there will take place economic disturbances, which, though they will not result in a depression, will certainly have a decided effect on the national income as compared with the prosperity we have been enjoying for the past few years. The man on the street, no longer assured of a pay envelope made fat by timeand-one-half pay for many hours of overtime work each week, will find that he can no longer afford to pay high prices for articles of luxury; and if the prices of necessities are too high he will confine himself to bare necessities. The retailer, to regain this thriftconscious citizen as a customer, will make demands on the wholesaler for merchandise that can be sold at a price within the means of his customer, and the wholesaler will in turn bring pressure to bear against the manufacturer, who will then place the issue squarely in the lap of his employee — the man in the (Continued on last page)