Harrison's Reports (1949)

Entered as second-class matter January 4, 1U21, 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 , M Y Publisher Canada 16.50 Wew York zu> N Y p. s. HARRISON, Editor Mexico, Cuba, Spain 16.50 A Motion Picture Reviewing Service Great Britain 17.50 Devoted Chiefly to the Interests of the Exhibitors Established July 1, 1919 Australia, New Zealand, India, Europe, Asia .... 17.50 Ug Editorial policy: 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 22, 1949 No. 4 A SOUND PLEA FOR A WORKABLE AND DESIRABLE ARBITRATION SYSTEM Prompted by this paper's editorial, "The Consequences of the Irresponsible Use of Power," which appeared in the January 1 issue, Mr. Jos. P. Uvick, president of Allied Theatres of Michigan, has sent this office the following article : "Your editorial 'The Consequences of the Irresponsible Use of Power' is so well founded and to the point that it motivated us to spotlight an analogous misuse of restrictive power that involves arbitration powers and procedure. "With one hand in New York the producer-distributors appear as trying to build a temple for arbitration to treat and cure industry ills by speedy inexpensive procedure. With the other hand in Detroit they appear to be digging the grave for arbitration to bury it in. They insist on still using restrictive technicalities as a means to disobey the law of the very same case that has placed them in their present dilemma with civil suits piling in on them. "In effect the producer-distributors are now standing before the three Federal Court judges as convicted conspirators awaiting the final sentence of the Court. It will attempt to dissolve their monopolistic grip on the industry. The judicial operation is aimed to amputate the heart and brain — the central mechanism of the octopus from its tentacles so all cannot function in coordinated unison as producers in Hollywood and as preferred exhibitors in every major city. "As they stand before this court their representatives in an arbitration case in Detroit insist that it is legal and right to circumvent the rules and nullify the law of the very case and court that is yet deliberating on the extent of divorcement. We cannot account why this is done, but will explain how. "A flash-back on the now expired consent decree providing for arbitration will help. We must recall that when the court signed the consent decree. Nov. 20, 1940, it was specifically agreed that no one was then presumed to have violated any law; that the decree provisions for arbitration were formulated on the basis of defendants being then innocent. When clearance was involved the distributors were permitted by the consent decree to justify reasonable clearance if their revenue (film rentals) were shown to be increased thereby. Arbitrators and appeal board were obliged to and did sustain clearances on that ground. May 3, 1948, the U. S. Supreme Court among other things ruled that competition and not distributors* revenue is to be the governing factor. The distributors pleaded for a modification of that rule. The court's answer was: " 'Some of the defendants ask that this provision be construed (or if necessary modified) to allow licensors in granting clearance to take into consideration what is reasonably necessary for a fair return to the licensor. " 'We reject that suggestion. If that were allowed, then the exhibitor-defendants would have an easy method of keeping alive at least some of the consequences of the effective conspiracy which they launched.' "This is the law of our land since May 3, 1948 as spelled out directly to these very distributors by our highest court. Yet in December, 1948, here is what the distributors say in an arbitration case to maintain existing clearances: " 'The testimony [is] entitled to the greatest weight, because it is given by Mr. Stuckey of Paramount and Mr. Levy of Twentieth Century-Fox, who have no particular axe to grind other than preserve a system of clearances over the entire Flint area which affords their companies the greatest revenue therefrom. . . "The arbitrator is also politely told that he has no right to follow the present law of the land. He should ostrich-like keep his head in the sand, confining himself strictly to the limitations of a 1940 consent decree as of when the defendants were still presumed to be innocent. "To persuade the arbitrator to disregard the law of the land they tell him that he must not deviate from the consent decree by the following: " 'The arbitrator's jurisdiction to hear and determine this controversy and his power to make an award are limited and governed by Sec. VIII of Consent Decree.' "The witnesses and attorneys for the distributor-producers carry out the policies of their principals as they are expected to do. No criticism is directed or intended against them. It's their superiors the policy makers who certainly are not helping to create a favorable acceptance of arbitration that is now being formulated. The alternative is the creation of hundreds of civil suits if arbitration is to be rendered useless. "We still hear the echo of 'Let's iron out our own differences within our industry' and that 'the industry is in the lap of the courts, is a target in federal and state legislatures.' Why? Is it anything that the average independent exhibitor has done or is now doing? We already have the court's answer on that. "We should have deeds and action consistent with the wailing and pleas of producer-distributor and affiliated interests. As exhibitors we all abhor governmental regulation and legal turmoil. Much of it could be avoided by fair arbitration if it's permitted to function as it should with even greater latitude than available in a court of law. The intent of this article is to focus the light on future arbitration proceedings and powers of arbitrators-to-be by a present concrete example of restriction even contrary to law. By all means let's have arbitration, but since it cannot be made obligatory or the only remedy, it behooves the powers that be to make it at least as attractive and more workable than a law-suit. Let's never permit either distributor or exhibitor to say you cannot follow the law of the land and point to a future decree of a court to justify that statement. "We believe it would only be fair and even wise for the administrative department of the distributors to invite independent exhibitor representatives to jointly consider what may be appropriate to offer for the court's approval on arbitration. "That would be working on industry problems within the industry."