Motion Picture News (Jan - Mar 1930)

March 8. 1930 Hudson Bill "Dangerous ''Socialistic and Radical" in Concept, Hays Counsel Says In An Analysis Provisions of the Hudson bill, in the form in which it has been introduced in Congress, "are so socialistic and radical as to constitute a dangerous menace to all branches of the industry," declares C. C. Pettijohn, Hays organization counsel, in an analysis of the measure prepared upon request of Motion Picture News. The bill seeks to brand the industry a public utility, and would make it a political football, providing unfair regulations and restrictions, he declares. The bill is "based on the idea of a Federal Commission with almost unlimited powers of control and supervision of every part and parcel of the industry, and therefore deserves to be carefully analyzed in order that all parties interested may fully realize its import." Pettijohn's analysis of the measure follows : Sec. 1, p. 1, L. 1 — Definitions "This section is devoted to definitions which are too lengthy to be taken up here. It contains all the definitions of the old bill except the fol. owing three: 'Anti Trust Law,' 'Article' and 'Commerce.' Sec. 2, p. 3, L. 14— Commissions "Here it is provided for the creation of commission to be known as the Federal M. P. Commission, composed of n.ne members. Four of them sha.l be women. They are to be appinted by the President, who shall designate one as a chairman, and are to be citizens of the United States quahfied by character, experience and train. ng for the duties of the oflice. It is to be noted that these appomtments are to be made solely by the President w.thout the advice or consent of the Senate. This is a most unusual provision, because all of the statutes providing for the creation of other similar commissions or quasi judicial bodies contain the provision with reference to the advice and consent of the Senate. Th.s applies evei. to the President's Cabinet. The next provision is that not more than five of the nine commissioners shall be members of the same political party, after which it is provided that they sha.l be appointed without party designation or without party responsibility. "This is a most contradictory provision, because it is impossible to conceive how not more than five sha 1 be of the same party and at the same time be appointed without designation. It is next provided that an appointment shall not be given to any person who at any time during the five years preceding his appointment has had any direct or indirect financial interest or other connection with production, distribution, exhibition or any cognate or related business. Here again we find another vague, indefinite and contradictory condition, because as we have heretofore seen, it is first provided that the commissioners shall be qualified by character, experience and training for the duties of the office, and it is the height of foily to assert that any person who has not been connected directly or indirectly with the industry for five years could be said to be qualified by character, experience and training for the duties of the office. However, this objection seems to be attempted to be removed by the next sentence, which provides that the 'Civil Service Commission, after examining the persons under oath and through corroborating investigations shall certify to the President of the United States that the persons chosen by him for the office comply with the provisions of this act.' With all due respect to the ability, standing and inte.2^'ty °{ t^e Civil Service ijonimission, we are still of the opinion that it would be impossible for even that body to find nine citizens, qualified by training, who for five years have had no connection whatsoever with the industry, to act as the industry's supreme court. "iThis is a very vital question and one which deserves earnest consideration by all members of the industry, because if they are to be ruled and controlled by a commission, it certainly would wish that at least a part of its personnel is made up of people with some practical and actual knowledge of the workings and mechanics of the business, and not have this business turned over to impractical. Incompetent or illusionary theoinsts. "It is further provided that these commissioners shall be appointed for a term of six years and that no member of the commission or any deputy com Motion Picture News 41 for a Federal Censorship Menace", Pettijohn Says Optimistic Representative Hudson still insists that his radical bill aimed at Federal censorship can be made to control every action on the screen, despite the popular belief prevalent in Washington circles that the rabid measure has no chance for passage in either House or Senate. Charles C. Pettijohn, in the interesting analysis of the measure appearing on this page, points out why Hudson's bill 'S harmful. missioner or any emp'.oyee shall have any connection w.th or financial inl crest in any branch whatsoever of the motion pictuie industry. "This section differs from the same section in the old bill wherein members were to be appointed by the Secretary of the Interior and the cornmission was to be a bureau under this department with the commissioner of education, as a member ex-ofTicio. This change in the bill, however, does not remove the objection, to wit, that the commission would be thrown into party pn'iHcs immediately and, as will be noted later, the possibilities for patronage under its provisir^ns are very wide. Every layman knows that wherever there is patronage there also will be found politics and manouvring, and we still submit that the effect of the passage of this bill would create another political machine at Washington, and result in throwing the whole motion picture business into politics, a pernicious and ruinous proceeding. Sec. 3, p. S, L. 15 — Salaries, Expenses "It is provided that each commissioner shall receive an annual salary of $9,000, except that the annual salary of the chairman shall be $10,000. Furthermore, that the commission shall have authority to employ and fix the compensation of deputy commissioners and such other employees as it may find necessary; also to hire suitable offices, procure all necessary supplies and equipment, and pay all necessary expenses for transportation incurred by the C'lmm ssioner or their emp'oyees in making investigations or official business. This is practically the same provision as Section 3 of the old hill, and aga'n we point out that this will permit the staff of the commission to be packed with 'patronage without limit,' Sec. 4, p. 6, L. 9— Offices "This section is the same as Section 4 in the old bill and provides that the principal ofl'ice of the commission shall be in Washington, but it may establish offices or bureaus wherever efficiency, economy and the public .nterest require. Kach bure^.u or office shall be in charge of a commissioner or a deputy commissioner. Here again we have more expense and patronage and the resu't of this and the preceding section would be to constitute a havep for those seeking lucrative jobs for their constituents, as will be developed later herein. There is absoluetely no check under the provisions of this bill on the number of offices or bureaus or upon the number of employees it can place upon its payroll, and the whole cost is to be chiirged up to the motion picture industry. Sec. S, p. 6, L. 19 — Duties of Commission "This section is identical witli the one in the old bill and provides that the duties of the commission shall be to protect the motion picture industry from unfair trade practices and monopoly, to provide for the just settlement of trade complaints, to supervise the production of silent and talking motion pictures at the source, and to provide for the proper distribution and exhibition thereof. Th's is a useless provision, because the Federal Trade Commission Act was passed and the commission created thereby in 1914 to protect all industries from these same, identical practices, and since 191S this commission has made numerous and extensive investigations of the industry, and. after trials, has entered a large number of orders to cease and desist from unfair practices. Furthermore, during the week of Oct. 10, 1927, in New York City, the Federal Trade Commission conducted a Trade Practice Conference in which representatives of all branches of the industry participated, with the resu't that a business code of ethics was. with the exception of a few disputed questions, agreed upon and is today accepted throughout the industry. There is an can be no need or necessity for another commssion. The Federal Trade Commission has amp'e power and authority to dispose of all unfair trade pr.icfices and the creation of a new commission would nullify all its work of the last ten years. The same situation exists as to monopoly, as this is fully and completely covered by the Sherman Law. The Dept. of Justice, after extensive investigations, has fi'ed three suits under this law against various members of the industry, one of which hns been decided by the U. S. District Court for the Southern District of New York, and the other two will come Would Make Political Football Of Industry If Passed, In His Opinion on for trial in the near future. It will thus be seen there is no necessity whatsoever for the creation of another branch of the government to duplicate these actions. "Production and distribution are two of the greatest problems of the industry. Ever since the birthof the industry persons with ability, brains and talent to solve these problems have been sought to better conditions, and at salaries larg'er than those provide* for members of this commission. It will be impossible under the terms of this bill to procure the services of those qualified for these duties, and surely no group of political appointees can possibly do a better job than is being done. The motion picture industry has always consistently kept out of politics. This bill would put it in. Sec. 6, p. 7, L. 1 — Unfair and Deceptive Practices Forbidden "This section is identical with a similar section in the old b.U. The first provision is one of its most an-.azing and radical declarations. It comprises only a short sentence, but its import and significance are of the greatest consequence, not oniy to the motion picture industry, but to ail other industries as well. It is as follows: 'The motion picture industry is hereby declared to be a public utility.' This means that all the concerns engaged in business in connection with the motion picture industry are by one stroke of the pen to be transformed into public service companies. This will include producers, distributors, exhibitors, laboratories, manufacturers of raw film, manufacturers of all devices, appliances, machinery and patented processes used in the industry, and also the makers of all advertising matter such as posters, slides, etc. Such a proposition is preposterous, because none of these industries have the necessary essentials or attributes of public utilities and Congress cannot change their character and functions by merely passing a law declaring them to be that which they are not. The legislative regulation through commission of public utilities finds its justification in the fact that they are quasi public corporations enjoying the benefits and the rights of eminent domain, and are, therefore, he'd properly subject to public regu'ation in tlie tlieory that they enjoy the benefits of quasi public status and should, therefore, bear the burdens of such status. Producers, distributors and exhibitors of films, and the other members of the industry, cannot be classed as public service corporations. There can be no distinctionmade between them and other manufacturers, wholesalers and retailers, for there is no difference in their essentials and functions to those of other industries. If this industry can. in this manner, be transformed overnight into a public utility, then in like manner could the automob'le industry, the clothing industry and all other industries be brouirht under governmental control, regulation and operation. ' "The remaining portion of this section makes unlawful 14 unfair practices listed, anjf and all of which can be easily corrected under existing laws, for example (b) refers to compulsory arbitration, which is now being litigated in a proceeding brought by the Dept. of Justice heretofore referred to; (c) refers to the reissuing of old pictures under new names. This practice ceased long since under the decision of the Federal Court in Fox v. Federal Trade Commission 296 Fed. 5.S3. Paragraphs 'e' and 'f are taken a'most verbatim from the Brookhart bill, wh'ch is now pending before the Interstate Committee of the U. S. They refer to block booking and se'ling films to affiliated theatres. The remaining paragraphs refer chiefly to price fixing and price manipulation, all of which can readily be dealt with by the courts. We cannot see why it is necessary to create a new tribunal to cover these practices. Sec. 7, p. II, L. 1-4 — Construction of Powers "This section also is identical with Section 7 ot the old bill and provides that nothing contained ir this bi'l shall be construed to prevent or interfere with the enforcement of or the procedure under the various anti-trust laws, including the Sherman Lawthe Clayton Act, the Interstate Commerce Act and the Webb Act. The effect of this provision wou'd create an absurd situation, because we would then have conflicting departments at Washintrtnn exercising concurrent jurisdiction over the enforcement of certain of the anti-trust laws. There is nothing anywhere in th's most unusual bill which informs us as to why it is necessary to create another bureau or department to enforce anti-trust laws. Sec. 8, p. 12, L. 15 — Application of Powers "This section follows that of the old bill and makes sections 5. 6, 8, 9 and 10 of the Federal Trade Commission Act aop'icable to the jurisdiction, powers and duties of this proposed commission. Sec. 9, p. 13, L. 4 — Power of Commission Modified "This section, like the one in the old bill, takes-