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The Kinematograph Year Book.
event at Eastbourne ; blazing hot weather set in and further depressed the box-office.
The Home Office considered new regulations governing film exhibition and in the main the year seemed to be progressing normally and uneventfully, apart from the unfortunate drop in the takings. From Washington, Eric Johnston, head of the Motion Picture Association, raised moderate but pointed criticism on future quota legislation and it was not until June 26 that the Kine gave the first inside tip, from i+s political correspondent, that the Government was assuming power to tax and not to freeze the earnings of imported films.
The Tax Bombshell
Then a few weeks later Eric Johnston was in England having talks in Whitehall. It was soon obvious that his discussions would have little practical consequences and during July the film thermometer dropped sharply, while the real one rose to record heights ; and in early August the Government announced its plan to put 75 per cent, duty on imported films — the announcement coming at a time when all Wardour Street seemed convinced that the restrictive measures would be a freezing and not a tax.
The Kine was alone in predicting that, in fact, a full tax was intended. It was a notable journalistic scoop, but it was one in which the paper took no pleasure.
The immediate result, as all film men know, was the American decision to send no new films into Britain while the tax, which Hollywood regarded as utterly confiscatory, was in operation.
Needless to say, so drastic and startling a development could not occur without upsetting the whole balance of film economy. News of the duty was taken very, very badly in New York and economies were introduced in studios in far California.
A Complete Deadlock
It was soon obvious that there was a position of complete deadlock, with the Americans declining to yield and with the British authorities emphasising that the import duty was not intended as a tax as such, but was merely an essential method of controlling the outgoing flood of dollars. It was the old business of bacon before Bogart ; food before films.
Obviously the measure was as unpopular in the British trade as it was in the American — for exhibitors, visualising an early and acute product shortage, were naturally depressed in the extreme.
Two months later the withdrawal of renters' backing for certain independent producers caused uneasiness throughout the studios.
Sir Alex. Korda and J. Arthur Rank were quick to assure the public that there was no production crisis and indeed it was a fact that big projects continued in production. On the other hand the