Harrison's Reports (1948)

Record Details:

Something wrong or inaccurate about this page? Let us Know!

Thanks for helping us continually improve the quality of the Lantern search engine for all of our users! We have millions of scanned pages, so user reports are incredibly helpful for us to identify places where we can improve and update the metadata.

Please describe the issue below, and click "Submit" to send your comments to our team! If you'd prefer, you can also send us an email to mhdl@commarts.wisc.edu with your comments.




We use Optical Character Recognition (OCR) during our scanning and processing workflow to make the content of each page searchable. You can view the automatically generated text below as well as copy and paste individual pieces of text to quote in your own work.

Text recognition is never 100% accurate. Many parts of the scanned page may not be reflected in the OCR text output, including: images, page layout, certain fonts or handwriting.

IN TWO SECTIONS — SECTION TWO HARRISON'S REPORTS Vol. XXX SATURDAY, MAY 8, 1948 76A THE SUPREME COURT SPEAKS— Continued By Abram F. Myers The Independent Partners In decreeing the termination of the joint relationships between the major companies and the independents the lower court lumped all these things together and made no special findings as to individual cases. Since vertical integrations are not unlawful per se, this was regarded as error. Each relationship must stand or fall according to its individual facts. We may eliminate from our present consideration such of these jointly-owned theatres as may be involved in first-run or territorial monopolies, since they are clearly subject to divestiture. The problem boils down to those joint relationships which are not subject to dissolution because not included in any monopoly. "We have gone into the record far enough," said the Court, "to be confident that at least some of these acquisitions by the (defendants) were the products of the unlawful practices which the defendants have inflicted on the industry. To the extent that these acquisitions were the fruits of monopolistic practices or restraints of trade, they should be divested." "Moreover," the court proceeded, "even if lawfully acquired, they may have been utilized as part of the conspiracy to eliminate or suppress competition in furtherance of the ends of the conspiracy. In that event, divestiture likewise would be justified." In all such cases the Court says flatly that "no permission to buy out the other owner should be given a defendant" — thus eliminating one of the weakest features of the lower court's decree. But the strongest provision of the Supreme Court's ruling is to the effect that "if the joint ownership is an alliance with one who is or would be a (theatre) operator but for the joint ownership, divorce should be decreed even though the affiliation was innocently acquired." "For," said the Court, "that joint ownership would afford opportunity to perpetuate the effects of the restraints of trade which the exhibitor-defendants have inflicted on the industry." Now this can only mean that in all cases of joint ownership where the independent partner is a theatre operator, or but for the affiliation would be a theatre operator, there must be divorcement regardless of any other factors. I need not stress the effect of this on the great Paramount Circuit where many of the theatres — perhaps most — are actually operated by the independent partners. As I read this part of the opinion, I can only conclude that Paramount's theatre empire is doomed — and the same goes for a large part of the Fox theatre holdings. And in these cases, most of them at least, the defendants supplied the basis for the necessary findings to insure divorcement by the testimony of their own circuit heads. By emphasizing the decentralization of control, defendants put their heads in a noose. What, then, are the theatres which the defendants conceivably may retain? They are described by the Court in a single sentence: "Some apparently involve no more than innocent investments by those who are not actual or potential operators." "If in such cases," the Court concluded, "the acquisition was not improperly used in furtherance of the conspiracy, its retention by the defendants would be justified in the absence of a finding that no monopoly resulted." And in such instances the Court held that permission might be given the defendants to acquire the independent's interest "on a showing by them and a finding by the Court that no monopoly resulted." Because of the failure of the District Court to discriminate among the affiliated theatres in its findings — to screen the innocent investments out of the unlawful acquisitions and other unlawful holdings — the Supreme Court found it necessary to eliminate the decree provision barring the five major companies from further theatre expansion. That was done merely because that provision was closely related to the monopoly question which the lower court had so badly bungled and it was felt that that court "should be allowed to make an entirely fresh start." To make this plain the Supreme Court added : "We in no way intimate, however, that the District Court erred in prohibiting further expansion by the five majors." It will be recalled that in the lower court and again in the Supreme Court the Department of Justice contended that, if total divestiture was denied, the licensing of films among and between the five theatre-owning defendants should be barred. The Supreme Court felt that, as a permanent requirement, this was but another way of forcing divestiture. But it left to the discretion of the District Court the question whether, in the absence of competitive bidding, a ban on cross-licensing "would serve as a short-range remedy in certain situations to dissipate the effects of the conspiracy." How Long Will It Take? The decisions insure ultimate victory in the long struggle for free and open competition and fair trade practices in the motion picture industry — but enjoyment of the fruits of victory is again postponed. The Supreme Court has decreed that the backbone of the motion picture trust shall be broken and it has given general directions to the District Court as to how that shall be accomplished. It only remains for the Attorney General vigorously to follow through on the advantage he has gained in order to secure the entry of final decrees in all three cases which not only will enjoin the defendants from unlawful conduct in the future but will wrest from them the properties, influence and power which they have unlawfully acquired. We can only hope that the action of the Supreme Court in remanding these cases to the District Courts with directions to explore new fields, to correct and enlarge their findings and to formulate and enter effective decrees will not result in undue loss of time. The defendants, according to trade paper intimations, already are planning to resume their pettifogging and dilatory tactics. One unnamed spokesman is reported as saying that the case is right back where it was 10 years ago; that it must now be tried all over again; that the facts must now be canvassed theatre-by-theatre, that much testimony will be taken and much time consumed. This would be a most disappointing outcome and not only would it postpone effective relief for several more years but it would make a travesty of the law. That considerable delay is entailed by the procedure is manifest. At most it should not take more than six months — although insistence by the judges on their long summer vacations may upset this calculation. The handwriting is now on the wall and its message is inescapable. The major companies now know that the jig is up; that sooner or later they must submit to the mandates of the law. They can no longer pursue their merry monopolistic way. The sooner they become reconciled to this, the better. If they persist in their stalling tactics, they will soon find that they have exhausted the patience of the courts. They should not overlook the fact that in the Paramount Case the Court twice referred to their "marked proclivity for unlawful (Continued on next page)