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54 MONEY BEHIND THE SCREEN
production or of its new cinema, we have only in recent months commenced to feel the effects of this development.
One of the most striking features of this expansion from a financial point of view, is the fact that on the production side it is based almost entirely on expectation -without any concrete results to justify that optimism, for the older companies that confine their activities to production, or production and renting, have for a number of years not been showing any substantial profits. By the time the first products of the new enterprises actually reach the market and the optimistic expectations can be tested, the first signs of an abatement m the forward movement can already be detected.
The second peculiar feature which applies to all branches of the industr}^ is that the expansion has with few outstanding exceptions been financed not by increases in the companies' own working capital, but by a spectacular increase in loans (whereas m " normal " booms the actual increase in business usually enables the expanding enterprises largely to hquidate existmg loan obligations).
In paragraphs 47 and 48, we have indicated the extent to which both short and long term loans have been taken up by all branches of the industry, even within so brief a period as the fii'st ten months of 1936, but there is reason to believe that it is this period and the latter half of 1935, which saw the most decisive increase in the industry's indebtedness. The following summary attempts to indicate the ratio between capital and loans in the two great combines and in the new production units (for the exhibition sphere this comparison is very difiicult in view of the fact that even in most of the large circuits, each cinema has a separate corporate existence, with separate capital and indebtedness) : —
Debentures moetgages or Capital short term Credits Combines : £ £
Gaumont-British Picture Corporation, Ltd. ... 6,250,000 6,500,000
Associated British Picture Corporation, Ltd. ... 3,550,000 3,500,000
9,i00,000 ' 10,000,000 Production and Renting Companies :
Old Production Units* 1,413,500 428,000
New Studio and Distributing Units** 1,670,000 378,000
New Production Units*** J,035,000 4,229,000
(State of October, 1930.) 4,118,500 5,03o,0(H)
* British and Dominion Films, A.T.P., StoU, Sound City, Tw^iokenham Studios, British Lion.
** O.C.F. Corporation, Cenernl Film Distributors, Pinewood Studios, Worton Hall Studios.
*** London Film Productions, Criterion Films, British Cino Allianoo, Pall Mall, Trafalgar, V. Saville, Atlantic Films, British Pictorial Productions, British National Films, City Films, H. Wilcox, Cnpitol Film Corporation. Cecil, Tooplitz, Uock, Fulhr, Urosvt-iior, Hammer.