Money behind the screen : a report prepared on behalf of the Film Council (1937)

MONEY BEHIND THK SrRKEN 71 able to (Iclav the impact of tin; criHiM, then in it.s iirHt violent phano, on \\w lilrn indimtry. 'lUv Kccond event waH tlio criHis itwil wliidi was rondered so nuieh the more violent, when at luHt it did ailect the movieH, by the enonnoua eont involved in Hcruppinj^ jM-rlectly good e(|iiipnient and product and rephicing it by even more exjR-nHivo new installations as a result of the technical chan^^e just indi<ated. In their joint effects these two sets of events revolutionise<l the financial no less than the technical basis of the American movie industry. The adoption of sound led to the emergenco — after violent KXTLANATOKY NOTKS FOR (HART F. The Morgan group (.1. 1'. Morgan & Co., and Dri-xcl & ('<».) in the moHt powerful linani ial group in tin I'.S.A. to-day. It8 power, built up through international and investment hanking extendn to every Hplwre of American economy. In January, 1932, Morgan partners were re])resented on Home Sf) hankw and i'A) nontinaneial eorjiorationa with assets totalling about §30 billion. Morgan influence is calculated to extend, directly or indirectly, to one quarter of the total < orporato wealth of the U.S.A. While the private wealth of the Rockefellers is even greater than that of the Morgans, their economic power, as expressed in the control of wealth, i.s n(jt as great. Rockefeller power was built up on oil, though it now extends to many other spheres, including banking. Apart from their vast real estate holdings, Rockefeller interests appear to predominate in banks and other corporations with assets totalling about S-'l.u billion (Jan., 19.31'). 1. American Telephone and Telegraph Co. : This four and a quarter billion combine was organised by Morgan and is still under Morgan " management " control (the 20 largest stockholders own less than 5 per cent, of its total stock). 14 of its 19 directors, including the president and vice-president, are more or less closely linked by cross-directorships to Morgan concerns, and a Morgan partner is a director of two important subsidiaries. Management links are reinforced by banking relations. A Rockefeller minority interest is represented on the board by W. W. Aldrich. 2. Western Electric Co. : Manufacturing subsidiary of A.T. & T.C. Markets sound film equipment through its subsidiary Electrical Research Products Inc. (ERPI). Western Electric equipment was until recently used under licence by all the major film companies except RKO. 3. General Electric Co. : Largest electrical manufacturers in the world. Organised by Morgan in 1892. Morgan still predominant, one Morgan partner and three other Morgan men on board. 4. Chase National Bank : Largest commercial bank in U.S.A. Controlled by John D. Rockefeller group since 1930. W. W. Aldrich, brother-in-law of J, D, Rockefeller, Jr., is president, two other members of the inner Rockefeller " cabinet " are board members. Rockefeller family has also substantial stock holding. 5. Radio Corporation of America : Incorporated in 1919 by G.E.C. to take over control of Marconi Co., and patent rights of G.E.C, Westinghouse Electric & Manufacturing Co., A.T. & T.C. and other concerns, Radio patent monopoly enforced under licensing system until 1930, when government anti-trust action led to a certain relaxation of control. The same action induced G.E.C. and Westinghouse to distribute their dominant stock interests to their stockholders, which implied a certain relaxation, though not elimination of control. At the same time Rockefeller interest became prominent and is still represented on the board (B. Ciitler of Chase National Bank). Sound film equipment is produced and marketed through R.C.A. Photophone Co., which recently added Warner, 20th Century-Fox and Columbia to R.K.O. as its Ucencees.