Minutes of evidence taken before the Departmental Committee on Cinematograph Films (1936)

108 COMMITTEE ON CINEMATOGRAPH FILMS 23 June, 1936.] Mr. D. E. Griffiths, Mr. S. Eckman, Mr. J. C. Graham, IContinued. Mr. J. Maxwell and Mr. F. Hill. 1133. That is high without reference to overtime ? — Yes. The fixed amount apart from overtime. I say it is extortionately high. 1134. Extortion suggests there is a combine? — On the part of the Union, yes. 1135. On the part of the Union? — Yes, I think we are very badly treated. I have had reason to say so publicly. I have had conditions put to me by the Electrical Trade Union that would involve with overtime my paying a working man £40 a week. 1136. The development of the industry in this country may be handicapped by the key-men demanding extortionate wages? — It is handicapped by extortionate wages throughout the whole of the industry. I used to pay a cameraman £12 per week, and now I cannot get one under £40-£50 a week. Some of them get £100 a week. These foreign producers who have come over here get millions from Insurance companies to chuck about, and they do chuck it about, to make sure of it while it lasts and before the inevitable bankruptcy supervenes. We native British producers working with tight belts because we intend to continue in business and pay dividends to our shareholders suffer from this unreasonable competition. 1137. There is an unreasonable disproportion between this small industry and comparable wages in other forms of industry? — Yes, undoubtedly. 1138. To what extent is that true in Hollywood? ■ — -From what I do know of it, of course, there the business is more stabilised and they have the labour problem better in hand and disciplined than we have here. Ours has been a mushroom growth, especially in the last three years, and the labour people know they have the ball at their feet and take advantage of it. But in a year or two when Insurance companies learn sense we shall be able to do better and get the business stabilised on a basis of permanency. 1139. Is there more than one Insurance? — Yes. Groups of underwriters are doing it. What they are doing is this. They are not lending money directly on pictures. They are issuing Guarantee Policies to banks who give overdrafts, and that brings it within the ostensible purpose of insurance underwriting. If a man wants £50,000 they say " Go to such-andsuch bank and they will give an overdraft of that amount and we will issue a policy guaranteeing that overdraft." The Bank take a mortgage charge on the picture and collect its proceeds and when in a year or two the loss (as it usually is) is ascertained, the Underwriters pay up the shortage to the Bank. 1140. This is a new form of inflation to me, and a very interesting one, and you suggest it is being specialised in from the point of view of the industry? — Yes, it is a regular thing for a man who wants to make a picture, to form a hundred-pound-Company for the purpose, to get a firm of Insurance brokers to fix up a loan for him on these lines. 1141. It comes to this, the plethora of cheap money due to over saving is actually having a bad effect upon the cinema industry? — Yes — in film production only by giving large sums to irresponsible and often inexperienced people who often spend it wastefully. 1142. And the average sum of 2s. 6d. per week which the working man is induced to pay to industrial assurance companies, actually helps to debauch your industry? —I might go further, and say the penny and twopence a week premium of the industrial workers may go, of course indirectly, in gambling in making films. 1143. Thank you, my Lord. I wish for no better evidence. 1144. (Chairman) : There is only one point which we have not covered and that is the policy of the renters as it affects the exhibitors. We have been told it is a great hardship to the small independent exhibitors that the renters impose an embargo on the placing of their films to any combination of these small renters? — Yes. 1145. Could you usefully comment on that statement?— I can easily. The Renters' Society has for many years had a policy that it will not deal with what is called booking combines, that is to say where a man who has got several cinemas undertakes to book films for another man who has another group of cinemas. The renters say to these people when they thus combine to force down prices that that is a buyers' combine arid that if it goes too far — and at one time there was a combine of a thousand cinemas threatened — renters will have to take what prices the buyers combine to give. Renters do not want to face it by a sellers' combine which they could form and would be the legitimate answer to maintain price levels. Instead of renters grouping together to form a sellers' combine to fix and maintain prices, they refuse to recognise the buyers' combines and insist on trading direct with the individual units composing it as formerly. Renters attack the disease at its roots before it can grow instead of letting it develop into a disastrous war between a buyers' combine on the one hand and a sellers' combine on the other. 1146. This controversy is rather one of finance than any necessary effort of the exhibitors to get a place in the sun to get a fair share of good films? — The exhibitors want the right to combine to any extent they like to force down prices. Renters say. " No, we will stop your combines before they start." because if they get away with it we shall have to form a ring and regulate the prices at which we will sell to them. 1147. The other aspect of this matter brought to this Committee is without some combination among independent exhibitors it is difficult for the smaller people to get a fair share of good films where there are six theatres in one area all tapping the same public the smaller people do not get any real opportunity of good material? — That is an exaggeration of course. No doubt — as in all business — the bigger groups with millions of capital in their properties have a larger buying power and expect to get a little better price because they are buying as wholesalers, and that is the grievance, of course. The smaller man says " I cannot buy as cheaply or have the same choice as that man with big capital " — but I have given figures to show how small it really is. and that the average number of theatres where a film is shown is 1.500, and of that 200 only are circuit bookings. My evidence here is somewhat in contradiction of F.B.I. , and I should like to add I am not in any way departing from anything I am committed to. I have a letter from Mr. Neville Kearney — because I asked " Am I entitled to go to this Committee and frankly give them my views? " — and he replied that I was. There was a mis-statement made in regard to the position of the two dissentient companies, the Gaumont-British and my own company. It was suggested our investment in the film production business was about a seventh of the total of the F.B.I. I would like to point out that was based on an erroneous assumption that the 21-5 pictures made in this country last year were all made by members of the F.B.I. Actually probably not more than half of the 215 were made by F.B.I, members and therefore the proportion given is completely wrong. 1148. Where was this mis-statement made? — It was in the evidence of Mr. Loudon, where it is said the proportion of the dissentient companies was a seventh in regard to our production position. I venture to suggesl thai in regard to money permanently invested in production the two dissentient companies have at least double the whole of the other F.B.I, companies pul together. 1149. Gentlemen, we are very much obliged to \oii for your evidence. (The Witnesses withdrew.)