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ALLIED STATES ASSOCIATION 673
For local committees, consideration should be given to the practical problem that, while certain houses in a zone might be so close to another zone as to make protection between the two necessary, such protection, known as overlapping, did not need to apply to other theaters in the respective zones.
Uneconomic theater expansion was considered by the Allied States Association to be a serious menace to the stability and wellbeing of the industry. Recognition was given to the impossibility of any binding agreements which might curtail such development. To alleviate conditions, however, the following course was recommended :
In each Film Board territory a committee shall be constituted as follows: one member selected by the local exhibitor organization, one by the distributor, and the third by these two, from five arbitrators nominated by the American Arbitration Society.
In any city, town, or locality where there is agitation for or rumors of impending theater expansion, the local exhibitor or exhibitors, or others, may request a hearing as to the necessity and/or desirability of such expansion. Such committee shall then convene and hold a hearing on the question.
It shall be the duty of this committee of three to meet in the city or locality where such expansion is to take place, and afford a hearing to all interested parties. The committee should give full consideration to the needs of the community, the number of seats already there, the number and class of theaters then running, the legitimate need of outlet for product, and the return from the locality to the distributors, together with all other economic aspects of the situation and the business in general.
After such hearings, the committee shall make its findings of fact and recommendations. If dissented to by any party in interest, such recommendations shall be reviewed by a national board, whose further recommendation shall be published as advisory in that situation.
The necessary expenses of such hearings shall be borne by those requesting the survey.
The Allied States proposal recommended the establishment of a national appeal board of six, to be selected as follows :
Two representatives from the distributors, two from the affiliated theaters, and two from the National Exhibitors Organization.
This body shall review and make final decision and/or recommendation in all controversies which may be brought to them on appeal from local zoning boards or theater expansion boards.
A vote of five out of the six shall be required for a final decision.