Harrison's Reports (1956)

48 HARRISON'S REPORTS March 24, 1956 Myers added that, if the film companies remain adamant and fail to promptly adopt remedial measures, legislation providing for the Federal regulation of film rentals, along the lines advocated by Allied, will be necessary to save the theatres. Powerful testimony was offered by Rube Shor, Allied's president, who, citing his own experience, took a mighty verbal swing at distributor abuses, setting forth fully the methods and devices resorted to by the film companies to extract exorbitant film rentals and fix admission prices in violation of the decrees in the Paramount Case. Shor cited in detail his experiences with Paramount on the picture "We're No Angels," and with MGM on Samuel Goldwyn's "Guys and Dolls." Shor also submitted facts and figures to support his contention that the film companies have confiscated the benefits of the admission tax relief; that discrimination in favor of large circuits still is being practiced by the film companies; that the divorced circuits, aided by a tolerant Department of Justice, are moving slowly in divesting themselves of certain theatres in compliance with the decrees; and that the policy of fewer pictures and extended runs in the key theatres is running the suburban and small-town theatres out of business. Strong, thorough and comprehensive testimony was offered by Trueman T. Rembusch, who backed up his statements with impressive and irrefutable statistics. A highlight of Rembusch's testimony was his blast against the prerelease evil which, as he pointed out, involves the fixing of admission prices through intimidation of the exhibitor, and the creation of new and excessive clearance periods. In discussing the harmful effects of these practices on the smaller theatres, Rembusch cited his own revealing experience in trying to buy "Guys and Dolls" and attacked Samuel Goldwyn's sales policy on the picture as being, not only unbearable, but also "the kind of stupidity that is wrecking the business of small city and town theatres." Adding to the "impossible film problems" now faced by the exhibitors, Rembusch saw potential danger in what he called "bastard width film processes" announced by the different film companies. By putting out pictures in nonstandard millimeter film widths, the film companies, as Rembusch sees it, will be able to run their product for long periods in specially selected big-city theatres, which can afford the special projection equipment that will be required and that no small theatre can afford. This new "gimmick," said Rembusch, will provide production-distribution with a new means of circumventing the law as to clearance, and when coupled with the product shortage and the pre-release evil, will "completely and finally bring the theatres of the nation under the complete control of production and distri' bution." To free the theatres from "the present terrible restraints that are condemning them to bankruptcy," Rembusch recommended to the Committee that (1) the Department of Justice be "nudged" to strictly police and enforce the provisions of the decrees; (2) that legislation for regulation of film rentals be enacted; (3) that steps be taken to amend the income tax laws so that punitive damages will be tax-free to an anti-trust plaintiff and may not be charged off as an expense by the defendants; (4) that the former affiliated circuits be permitted to engage in production and distribution, with proper restrictions; (5) and that the Committee look into the quotas imposed by foreign governments on the importation of American films and "consider the feasibility of creating supports for those American producers producing pictures in excess of the number now absorbed under the foreign quota system." In his testimony, Benjamin N. Berger, North Central Allied president, stressed that the selling policies and practices of the film companies are preventing thousands of theatres from showing many of the finest motion pictures and are preventing millions of Americans, especially in the low income brackets, from seeing these pictures. Pointing to the motion picture theatre in every community as a "necessity" and not a "dispensable luxury," Berger insisted that "there is a definite public interest in keeping the theatres open and providing this kind of entertainment to American citizens wherever they may be located and however they may be situated." The film companies, stated Berger, by making fewer pictures for exhibition in fewer theatres at higher prices, "have adopted the strange attitude that the future of the business depends upon converting it into class entertainment." He then asserted that, "in view of the public interest aspect of the motion picture business, I do not think it is going too far to say that the lower income people have a right to see the nationally advertised top motion pictures in the lower priced theatres which they attend." Accordingly, he expressed the earnest hope that the Committee "will recommend the enactment of appropriate legislation which will enable every theatre owner in the land to insure to his patrons the right to see all the top pictures, at prices they both can afford." Wilbur Snaper, during his turn on the witness stand, called for more aggressive and vigilant action on the part of the Department of Justice in enforcing the decrees, claiming that such vigilance should serve to cure many of the ills that beset distributor-exhibitor relations. He added that, unless relief is forthcoming soon, many theatres may go under, unless they can survive on the profits from candy and popcorn sales. Julius Gordon, Allied's treasurer, cited results of his recent study of the foreign film markets and made a conn parison of film rentals here and abroad. He pointed out that a number of foreign governments have put a ceiling on film rentals, and asserted that the American producers are not only selling their films cheaper to foreign exhibitors than to those at home, but they also arbitrate film rentals abroad even though they refuse to do so in this country. Another witness, offered by both Allied and the Theatre Owners of America, was Wesley A. Sturges, a law professor and former dean of the Yale University Law School, and now on leave to the University of Miami Law School. Sturges, testifying on the arbitrability of film rentals, stated that he knew of no inherent difficulty to prevent arbitration of the reasonableness of film rentals, and he rejected the claim that it would enable an exhibitor to establish a standard figure for all his film rentals. Because conflicting dates made it impossible for representatives of the Southern California Theatre Owners Association to attend the hearing, Harry C. Arthur, Jr., board chairman, submitted his organization's views in the form of a letter to the Committee. Briefly, the SCTOA went on record against the subtle control of admission prices by the distributors; called for competitive bidding to be conducted in accordance with clear and definite rules, with the successful bid to be disclosed; recommended granting permission to the former divorced circuits to enter production-distribution, with necessary safeguards; favored arbitration but condemned the proposed system as one that is being used to secure judicial recognition of a pre-release practice that should be condemned; and recommended the establishment of a Federal Fair Trade Practices Commission to "evolve and adopt and then to administer rules of fair trade in this industry." Testimony offered by other witnesses will be treated in next week's issue. Brief Reviews "The Harder They Fall," a Columbia release starring Humphrey Bogart, Rod Steiger and Jan Sterling, is an excellent melodrama centering around racketeers and malpractices in the prizefight game. "Emergency Hospital," a United Artists release starring Margaret Lindsay, is a fairly good program melodrama centering around the odd events that take place in a big^ city hospital from midnight to dawn. Full reviews of the above pictures will appear in next week's issue.