Motion Picture Daily (Apr-Jun 1935)

8 MOTION PICTURE DAI LY Friday, April 26. 1935 KAO's Share Of Met to Be From 20-25% {Continued from page 1) dispose of 25 per cent of it to K-A-O, the court was told. If the Fox Theatres' option is exercised, however, K-A-0 will be permitted to acquire only a 20 per cent interest. Swope testified that K-A-O's concern in the proposed acquisition of Fox Met by Schenck was solely with the problem of product which would confront K-A-0 as a result of the change. He said that a number of plans of action devised by K-A-0 as a result of its concern over the situation were solely designed as protective moves and that there was no actual desire on K-A-O's part to acquire the circuit. The protective moves enumerated by Swope included several conferences with Schenck in California as to his intended policies in the event he acquired Fox Met, which resulted in his being told by Schenck that the latter would be willing "to go along" with the present product arrangements between Fox Met and K-A-O. Swope said, however, that the declarations he received from Schenck were "not very reassuring." Swope said he also wanted to find out whether Nicholas M. Schenck of Loew's was involved in the Fox Met plan and that he, Swope, had been reassured by David Sarnoff, chairman of the board of RKO, that he was not, and that the Loew chieftain also phoned him in California to tell him the same thing. Says K-A-0 Still Free to Bid Swope persistently denied that KA-0 had entered upon the agreement to participate in the Schenck-Fox Theatres' plan with the condition that K-A-0 would not present a plan of reorganization of its own for Fox Met. He testified that while it was "highly unlikely" that K-A-0 would now present a plan if the Schenck bid is successful, the RKO theatre company, nevertheless, is still at liberty to do so. He added that, prior to the understanding with Schenck, K-A-0 had discussed the possibility of presenting a plan and financing it with an "outside source," with three different film companies and with Si Fabian, who also is proposing a Fox Met reorganization plan. He denied that one of the companies with which he had discussed a plan was M-G-M. The K-A-0 head emphasized that his company was primarily interested in a perpetuation of Fox Met's present operating status in order to "avoid excessive film costs and ruinous competition." At one point during Swope's testimony Judge Mack remarked that "one of the things that might lead to the overthrow or rejection of Schenck's plan could be the probability of K-A-0 offering a plan if the Schenck plan is rejected." Milton Weisman, associate of Schenck in the reorganization plan as receiver for Fox Theatres, had another uncomfortable session on the stand yesterday. He denied a statement in an article read from Motion Picture Daily of April 19 which quoted him as saying that he believed the Schenck Fox Theatres' plan would be approved by the court. Judge Mack remarked that if the statement were true, hi considered it "highly improper for an attorney to predict the outcome of a case before the court" and such a remark, if true, "might influence the court now." Fabian was placed on the stand and interrogated on the proposal he has made for reorganization of Fox Met and testified that he did not consider the Fox franchise of great importance to Fox Met in a reorganization as there would be an "open" film market in the metropolitan area next season with K-A-0 assured of only Radio and possibly Fox product. He said that George Schaefer had assured him Fox Met would be able to get Paramount product if it was reorganized under Fabian and that Herman Starr had said that Warners, too, would "continue to sell these theatres." Fabian offered the opinion that Fox Met and K-A-0 would be "natural allies" and their combined buying power would eliminate all problems of obtaining product. He estimated that under his plan Fox Met could be operated at an overhead "$250,000 less than it was in 1934." Fabian will resume the stand today. Campi to Send Out Code Bills Shortly With the NRA approval of the 1935 budget for $359,575, Campi within the next few days will send out bills to 9,169 code assentors for the first half of the current year. The Los Angeles clearance and zoning schedule is expected to be ready today and will be sent to the coast by air mail. It provides for 20 different price schedules, according to zones. The local board is expected to set May 9 as the date when the plan will become effective. Hanson Confers with Flinn on Clearances Al Hanson, Los Angeles city manager for Fox West Coast with 28 houses under his supervision, yesterday conferred with John C. Flinn on details of the revised coast schedule. Edward Alperson, chief buyer for the circuit, also attended the session. Meanwhile, FWC has taken no legal action on the schedule. Hanson had planned to leave for the coast by plane immediately after the conference, but the length of the session forced him to postpone his departure until today. Film Congress Open; British Not Present Berlin, April 25.— About 1,000 delegates said to represent 38 countries opened the International Film Congress here today. Dutch and Britishs representatives were not present. Restrictions placed on British films were given as the reason. A British spokesman said the whole German industry was under the domination of the government and there could be no free discussion. Report New N. O. Studio New Orleans, April 25. — Reports are current that George Orth of New York intends to build a two-stage sound studio near the Shushan Airport on a 50-acre plot. Production and rental of space are included in the plans, according to report. Rosenblatt Charges To Grievance Board Charges by Leon Rosenblatt of the RosenblattWelt circuit that Skouras Theatres, operating the Pascack, Westwood, employed unfair tactics in buying product away from the Westwood, Westwood, have been referred to the local grievance board by a Campi committee comprising Paul Burger, Henry Sussman and F. Thomas Murray after a hearing. Rosenblatt claims that for the current season he could get only 49 Columbia films first run with Skouras using the buying power of Fox West Coast to take away products he had had in former years. This, however, was denied by Louis Weber, attorney for Skouras. The Campi committee held that the local board had no right to certify the case to Code Authority and that a decision must be made after a rehearing with preference on the calendar. If the decision of the local board is appealed, preference will also be given on the appeal calendar. It was pointed out during the hearing that Rosenblatt previously had won an overbuying case for the Orient, Jersey City, against Skouras, but when Campi finally handed down a verdict the ruling of the lower board was reversed. Clearance Ruling Is Clarified in Boston Boston, April 25. — An executive session of the clearance and zoning board has clarified a recent Greater Boston decision that stated : "First run Newton shall have clearance oyer Needham and Wellesley. Availability for Needham and Wellesley shall be immediately after Newton day and date, but not more than seven days after Newton for either town. First run Newton shall have seven days clearance over first run Watertown. First run Newton shall have seven days clearance over first run Waverly." The new decision of the Board is : "That p}ay dates for pictures may be submitted by either Needham or Wellesley and if accepted by the exchange for either Needham or Wellesley then said date shall be immediately made available for the other, notice to be given by the exchange to the other theatre immediately that such date is accepted with opportunity to book pictures on the same date. The above applies only to dates submitted within seven days after Newton, after which time either town may book irrespective of the other." Mail Officials Order Out Frisco Bank Ads (Continued from page 1) they violate the Federal laws against lotteries. As a result no papers carried bank night notices today. Affecting some 40 advertising theatres, the order will have the effect of practically cleaning up pending bank night litigation because bank nights will be crippled if theatres are unable to use the newspapers. Liberty Buys "Sally" Hollywood, April 25. — Liberty has purchased "Sally of Show Alley," a novel by Homer King Gordon, as one of the 12 for next season. Say Missouri Can Prosecute On Bank Night (Continued from page 1) the plan to the attorney general, indicated it was permitted in two adjoining states, Iowa and Kansas, and asked since the participant is not required to buy an admission to the theatre for a chance to win the prize, whether bank night falls within the lottery law "or is a legitimate advertising plan." The opinion, written by an assistant attorney general and approved by the attorney general, recalled that the state law was passed pursuant to a mandate prohibiting lotteries and gift enterprises contained in the Missouri constitution. Numerous court decisions were cited to show it is immaterial that participants do not have to pay a consideration. Bank Nights Win Round in K. C. Kansas City, April 25. — Bank night interests won a victory today when Mrs. A. Baier's complaint against R. W. McEwan, bank night distributor, and Rube Finkelstein of the Belmont was dismissed by the county prosecutor, who said he could not act unless she signed as a complaining witness, which she refused to do on the ground that it might involve her in future complications. Massachusetts Race Fight Tangles Anew Boston, April 25. — More complications have developed in the fight on horse and dog racing with pari-mutuel betting. Daniel Callahan, who sought an injunction to stop work on the Eastern Racing Ass'n. track, has signed an affidavit to the effect that he was given $200 by out-of-state racing interests to start the move. The House has turned down the Senate bill to refuse appropriations to the State Racing Commission. To help the proposed racing venture at Agawam, Governor Curley is seeking an extension of the racing days from 70 to 100. Dog tracks seem to be doomed as a result of the general agitation, but horse racing may get started late in the summer. Chicago Bans "G Men" Chicago, April 25. — Chicago has banned Warners' "G Men." H. M. Costello, head of the Chicago Crime Prevention Bureau, who cooperates with the censors, said that while the film taught a moral lesson the machine gun scenes "would prove over-stimulating for children." "G Men" for Strand Warners yesterday changed their minds about reopening the Warner theatre with "G Men" and the picture is now dated for the Strand May 1. "Go Into Your Dance" has been booked into the Capitol starting May 3. Sisk Is Flying East Hollywood, April 25. — Robert Sisk is flying to New York with a print of Radio's "The Informer."