Harrison's Reports (1949)

Entered as second-class matter January 4, 1021, at the post ollice 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 L. «>n w v Publisher Canada 16.50 Wew York zu' w 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 Editoria, Poiicy: 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, DECEMBER 3, 1949 No. 49 THE RELATION OF THE MINIMUM WAGE LAW TO MOTION PICTURE THEATRES Several exhibitors have written to this paper for infor' mation about the Fair Labor Standards Amendments of 1949, commonly referred to as the minimum wage law, which was approved by President Truman on October 26, 1949, and which increases the minimum wage of certain in' terstate employees from 40c per hour to 75c per hour. They want to know if the law applies to motion picture theatre employees. The minimum wage law, with certain specific exemptions, covers those employees who are in a closely related process or occupation directly essential to the production of goods sold in interstate commerce. The answer, therefore, would seem to hinge on whether or not theatre employees are in a "closely related process or occupation directly essential to the production" of motion picture films. That the query is an interesting one is evidenced by the fact that it is the unanimous opinion of several attorneys questioned by the writer that, until the issue is tried out in the courts, no one can say definitely whether or not the law applies to theatre employees. One of the attorneys, a prominent man who is close to the Washington scene and who is well versed in legislative mat' ters, has assured the writer that, in his considered opinion, the law does not apply to motion picture theatres. The basis of this exclusion, he said, is to be found in the definitions of interstate commerce and the analogy of motion picture exhibition to retail and service businesses that are expressly excluded. In his opinion, the operation of a theatre is not a "closely related process or occupation directly essential to the production" of films, for the paragraph containing this defini' tion indicates quite clearly that it is aimed primarily at production or operations closely connected therewith. He points out that, while motion picture theatres are not specifically exempted from the law, they more nearly correspond to some of the exempted businesses than to any that are included in the legislation. Thus, he says, Section 11 (amending Section 13 of the original act) exempts (1) "any employee employed in a bona fide . . . retailing capacity; or (2) any employee employed by any retail or service establishment, more than 50 per centum of which establishment's annual dollar volume of sales of goods or services is made within the State in which the establishment is located." "A 'retail or service establishment" shall mean an establishment 75 per centum of whose annual dollar volume of sales of goods or services (or of both) is not for resale and is recognized as retail sales or services in the particular industry." Pointing out that this bill was put together hastily in the closing hours of the last session of Congress, and that it is not as clearly worded as it should be, this attorney recalls that those who will have to administer the law said that it would prove a monument to litigation. He adds that it is not inconceivable that some zealous Administrator may try to apply the law to the theatres, in which case the issue will have to be tried out in the courts, but he feels quite certain that the attempt will fail. "Congress," continues this attorney, "undoubtedly has constitutional authority to enact wage and hours legislation containing broad definitions of interstate commerce which would include motion picture theatres. In the present case Congress has not exerted its full authority in that regard and I think the legislation does not reach to the theatres. "The committee reports and conference reports attending the passage of the bill, while not necessarily conclusive, also contain passages which lend comfort to the thought that the law does not include theatres. The most serious question, and the one most likely to arise, is in respect to large cir' cuits which operate in a number of States." LET US NOT BE PICAYUNE In a recent Service Bulletin of The Independent Theatre Owners of Ohio, Pete Wood, secretary of that organization, had this to say under the heading, "WHY FILM RENTALS ARE HIGH": "Buried in one .of the inside pages of one of the trade papers is a story that 20th Century-Fox has extended the contract of studio chief, Darryl F. Zanuck for a period of twenty years. During the first ten years of the extended contract, Mr. Zanuck will be paid a salary of $2,600,000, plus a liberal expense account. For the last ten years of the extension, Mr. Zanuck will be paid a pension of $150,000 per year, or a total of $1,500,000. "We wonder what the stockholders of 20th Century-Fox think of this astounding employment contract which obli' gates the company to pay Mr. Zanuck $4,100,000 in salary and pension." (All the italics are Pete's.) In criticizing Darryl Zanuck's salary in an effort to prove that it is one of the causes of high film rentals, Pete Wood does not take into consideration whether or not Mr. Zanuck is delivering to his company the type of product that entitles him to such a salary. Would the rentals for the exhibitors come down if Mr. Zanuck were to receive fifty thousand dollars a year, for example, and delivered product that would drive patrons away from the box-offices? A similar criticism was made at different times also of Louis B. Mayer. This paper feels that Spyros Skouras, president of the company, did the wise thing to tie up Mr. Zanuck for a period of twenty years, for it is sure that other companies, too, would like to have his services and would be willing to pay him even more than he is paid by 20th Century-Fox, for studio executives who can deliver a consistently good line of product are scarce, and the company that has such an executive is naturally eager to keep him. Mr. Zanuck must be happy with his present arrangement, for if salary alone was the question he undoubtedly could have received more, either from 20th Century-Fox or from some other company. And a satisfied studio head is beneficial, not only to the company but also to the exhibitors, for he has the incentive to devote all his ability to producing good pictures. Let us not stop criticizing cither the producers or the distributors for unlair treatment that might be given to the exhibitors, but when we do criticize let us be sure that our criticism is constructive. Otherwise, we become ineffective.