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674 HARVARD BUSINESS REPORTS
In case of no decision by this board, the question at issue will be referred for final decision or recommendation, as the case may be, to an arbitration committee consisting of one representative appointed by the National Exhibitors Organization, one appointed either by the distributors or the affiliated theater group, and a third to be selected by the two from a group of five nominated by the American Arbitration Society.
The Allied States Association could see no objection to a single independent exhibitor organization, provided that supreme executive authority was vested in a man outside the motion picture industry and provided that such an organization was developed along approved lines. Concerning the approved lines, the Allied States Association recommended its own organization as being one which was constituted in such a manner as would give full representation to every unit that was desirous of affiliating; any national organization to be successful should be patterned after the Allied plan.
The association made no objection to state or regional organizations having affiliated theaters included in their membership, provided that these theaters entered on the same conditions on which the independent theater owners were admitted in 1929 and 1930. Statement was made to the effect that, when affiliated theaters joined the local, state, or regional units, they should have on the board of directors of each organization at least one representative who should have full voice and vote in all matters. Such affiliated men, however, should not at any time hold any office in such associations.
Affiliated theaters would be required to pay the same fee per theater seat as that paid by the independent theater. An annual budget of at least $100,000 was recommended as necessary for the successful operation of the proposed National Exhibitor Organization.
The proposals submitted by the Motion Picture Theater Owners Association on matters pertaining to arbitration, contract form, and protection were fundamentally the same as those presented by the Allied States Association. Concerning arbitration, the Motion Picture Theater Owners Association commented on the effectiveness of the system, but in order to make it voluntary, suggested that a separate agreement to arbitrate should become a part of each contract. Under the plan, the Film Board of Trade and Local Exhibitors Unit would each provide four arbitrators,