Harrison's Reports (1949)

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, 1879. Harrison's Reports Yearly Subscription Rates: 1270 AVENUE OF THE AMERICAS Published Weekly by United States $15.00 (Formerly Sixth Avenue) Harrison's Reports, Inc., U. S. Insular Possessions. 16.50 « • v . nn v Publisher Canada 16.50 New York 20, N. Y. p g jjARRISON, Editor Mexico, Cuba, Spain 16.50 A Motion Picture Reviewing Service Great Britain ............ 15.75 Devoted Chiefly to the Interests of the Exhibitors Established July 1 1919 Australia, New Zealand, J India, Europe, Asia ... . 17.50 Itg Editorial Po]icy: No problem Too Big for Its Editorial Circle 7-4622 35c a Copy Columns, if It is to Benefit the Exhibitor. A REVIEWING SERVICE FREE FROM THE INFLUENCE OF FILM ADVERTISING Vol. XXXI SATURDAY, JANUARY 1, 1949 No. 1 THE CONSEQUENCES OF THE IRRESPONSIBLE USE OF POWER Monopoly in industry, which has taken quite a beating from the Courts in 1948, may find itself faced with even greater headaches in 1949 as a result of recommendations made this week in an unanimous report submitted to Congress by the House Small Business Committee which, during the past year, carried on an intensive investigation of monopolies. The Committee conducted hearings in a number of cities throughout the country, at which times it lis' tened to the complaints of many small business men, including exhibitors. Recommending stiffer anti-trust laws and more rigid enforcement, the Committee stated in its report that, "if capitalism in the United States is not to experience the fate of other capitalistic systems abroad, then time is of the essence in achieving a successful working of the nation's laws against private monopoly and restraints of trade." The Committee pointed out that, under the present anti-trust laws, the penalties for violations, including fines and jail sentences, are inadequate and have not served to deter offenders. Moreover, it stated, the violators usually are only fined. At a news conference in connection with the release of the report, Committee Chairman Walter Ploeser, Republican, of Missouri, stated that the fines meted out to violators of the anti-trust laws are "just a slap on the wrist for a serious offense." "They are," he continued, "a cheap tax to pay, and in fact can be used as a base of expense for new profits — just another business expense." In its recommendations the Committee, to offset the inadequacy of the present penalties, proposed that executives convicted of anti-trust violations be enjoined for a minimum number of years from serving as officers or directors of any company doing business in the United States. It suggests that the period of years be increased for second-offenders, and that, in the case of chronic offenders, "consideration should be given to permanent injunction." Other recommendations that would have an effect on the motion picture industry include : 1. The creation of special anti-trust courts, which would "facilitate trial and appeal of cases, would provide judges with a specialised knowledge of the anti-trust laws, and would result in uniform decisions regarding the anti-trust laws." Anti-trust cases would originate in these special courts, and appeals would be made directly to the Supreme Court. This recommendation, as well as some of the other sweeping monopoly law changes, are in accordance with suggestions offered to the Committee by Mr. Abram F. Myers, National Allied's general counsel, at one of the hearings held in Washington last November. 2. An amendment to the Robinson-Patman Fair Trade Act to "prohibit discriminations in rentals or royalties for commodities, including patented and copyrighted articles, which are leased or licensed in interstate commerce." Violators would be subject to civil suits for treble damages. Under the present law, only the victims of price conspiracies may institute treble damage suits. The proposed amendment would extend this privilege to those who are injured by price discrimination. National Allied is sponsoring this amendment which, according to Chairman Ploeser, would include also film rentals. If adopted by the Congress, it will, in effect, compel the distributors to license their films to competing theatres, comparative in size and in type of operation, at the same rentals. In other words, if you are an independent in competition with either an affiliated or large independent circuit theatre, you will not have to pay more for film than your competitors, provided, of course, that your house is at least equal in size and appointments. 3. An amendment to the Internal Revenue code to provide that losses sustained by an individual unit of an interstate chain operation should not be deductible from the parent organisation's income for tax purposes if the losses incurred are the result of selling either below cost "or at an unreasonably low price to eliminate local competition." In short, such an amendment will serve to prevent a circuit theatre of a national chain from setting low admission prices and operating at a loss in order to force out a competing theatre. 4. Larger appropriations for more adequate antitrust enforcement to preserve "freedom of economic opportunity." 5. The prohibition of mergers that tend to lessen competition. 6. The prohibition of consent decrees in anti-trust actions "where the offense charged involves a conspiracy to control prices or to control supply, selling below cost to eliminate competitors, full line forcing and tying contracts, or exclusive leases, sales, or contracts, discriminatory allowances, discounts or secret rebates above a specified amount, and where the offense has operated for more than three calendar years after the effective date of this provision." Where consent decrees are permitted, the Committee recommends that their contents be made public at least 60 days before their approval by the court so that all parties affected will have ample time to study them. Such parties will have the right to object to the con (Continued on bac\ page)