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552 MOTION PICTURES I922-I945
$130,000,000 in impounded funds owed to our industry by Great Britain, Australia, and New Zealand.
Difficulties, negotiations, delays seemed endless. Now there remain chiefly the memory of a tough problem, two groups of men seeking earnestly to solve it, and the sense of relief when the solution was found. Judged both by the importance of the international factors concerned and by the amount of money involved, it was the biggest financial problem of my Association days. And in no other case was the co-operation of our State Department more brilliantly illustrated.
At best, when war struck England, her domestic picture production had to give way to more urgent needs. In the reaction to the blow, theatres in England closed. But they remained so for only seventy hours. By popular demand they were forced to reopen, because otherwise "people had no place to go, and they had to find relief somewhere." As Lord Halifax said to us with utmost urgency, "We've got to have pictures—a lot of them— to keep up the people's morale!" We sent them over, fast, even by air. And we kept it up.
Like any doctor or pharmaceutical laboratory answering an emergency call, we sent the pictures and much later worried about the bill. But we did begin worrying by the autumn of 1940, when I had long conferences with Joe Kennedy about the possibility of British payments. Our normal income from England had passed $30,000,000 by 1936, and now that the British were almost solely dependent on us, the figure was naturally mounting. Within another year our companies were to be giving millions in free films and service to the government and to our men in training, but they had to have income. It was particularly hard for the smaller companies.
Both sides recognizing that full cash payments for films were at present out of the question, a special arrangement was made, implemented by a series of three annual agreements with Great Britain, Australia, and New Zealand. These agreements provided for the retention or "freezing" of a substantial part of the revenues currently due to American producers.
By 1 94 1 our British problem, beginning to be acute as well as chronic, had to receive attention. Over there war had been going on for two years. Losses had been heavy; resistance magnificent. We were told that we were doing a lot to hold up the morale of the people. The destruction of the "Hays Office" in London by Nazi bombs in February of 1 94 1 made us feel that much closer.
But by contract agreement we were restricted to $12,000,000 payment out of $35,000,000 or more. When it appeared that American companies would have nearly $50,000,000 frozen in England, Australia, and New Zealand by November 1, when the current financial pact with Britain was to expire, and that $40,000,000 of this was in the British Isles,