Motion Picture Daily (July–Sept 1938)

Wert. Intelligent ova MOTION PICTURE DAILY 44. NO. 11 NEW YORK, MONDAY, JULY 18, 1938 TEN CENTS ra. May Ask Rehearing in North Dakota ederal Court Upholds "Divorce" Statute Paramount may petition a rehearing its action attacking the constitunality of the North D.akota affili•d theatre "divorce" law before tak5 an appeal direct to the U. S. Su;me Court from the decision handed wn on Friday upholding the statofficials of the company stated cr the weekend. A decision on whether a rehearing 11 be sought or the appeal taken mediately will be made by the comny as soon as attorneys have com•ted their study of the court's opin 1 and its findings of fact and collisions at law. The three-judge Federal statutory jurt which early in June heard the guments on the constitutionality of 2 North Dakota statute which re■ires producers and distributors to test themselves of theatre operating crests within the state was unanitus in its decision upholding the (Continued on page 4) 'apers in La Crosse Suit Are Sent Out .Madison, July 17. — Copies of the mplaint in the anti-trust suit filed Federal court here late last week '' the La Crosse Theatres Co., Inc., jainst three major distributors and jdnnesota Amusement Co. were for,'irded to the defendants over the a ?ekend. The suit seeks treble damages of M)50,000 and charges the defendants '.■tered into a conspiracy to force it (Continued on page 3) TO A Delays Drive 'For Jersey Members ^The I.T.O.A. has postponed infinitely its intended membership ive in New Jersey in retaliation for e organization of an Allied unit in ew York state, which, according to arry Brandt, violated a long-stand "g agreement not to invade each her's territory. It was said, however, that a mem[ rship drive may be undertaken in ( iew Jersey in September. k Radio News — P. 34 Atlas Talking Deal for More RKO Stock RCA's Desires for Voice In Control a Factor Negotiations for acquisition by Atlas Corp. of additional RKO securities under the investment company's option with RCA were begun late last week by Floyd Odium, Atlas president, and David Sarnoff, RCA head, and will probably be concluded this week. An important factor in the negotiations, according to report, is RCA's insistence on having a voice in the designation of the reorganized company's new management, in addition to representation on the new board of directors, in the event that Atlas does not acquire at this time the $5,500,000 balance of RKO securities still held by RCA. Under the option, Atlas may either acquire the entire RCA holdings this month or obtain an extension of the option to Dec. 31 by the purchase of one-twelfth of the holdings for $500,000 cash. Atlas was reported to favor the latter course until it was confronted with RCA's (Continued on pane 33) U. S. to Intervene In RKO Proceedings Federal Judge William Bondy has signed an order permitting the United States of America, on application of Lamar Hardy, U. S. Attorney, to intervene in RKO's reorganization proceedings and to become a party to the presentation of evidence and argument upon the question of the constitutionality of Section 77B of the Bankruptcy Act. The Government's petition stated that on June 3, 1938, H. Cassel & Co., Copia Realty Corp. and Fabian Operating Corp. of New York, as creditors of RKO, filed objections to the (Continued on page 33) Kansas City Unions Refuse to Take Cut Kansas City, July 17.— The I.A.T.S.E. stagehands' and operators' unions here have turned down a request for a 25 per cent reduction made by the Mainstreet, Midland and Newman theatres, downtown first runs. The unions will insist on the five per cent increase called for by the twoyear contracts signed with the theatres last year and effective Sept. 1. Bad business was the basis of the theatres' request for a reduction. DIETZ HEADS UNIT FOR TRADE DRIVE Warners' 39-Week Net Is $3,282,765 A net operating profit of $3,282,765.03 for the 39 weeks ending May 28 is reported by Warners and subsidiaries. This compares with a net of $5,561,032.16 for the corresponding 1937 period. Both figures are after all charges, including amotization and depreciation and normal Federal income taxes but without Federal surtaxes. The income from operations before deducting these charges was $8,432,787.64. The net profit, after charges, is equal to $31.83 a share on 103,107 shares of preferred stock and, after allowing for current dividend requirements on the preferred, to 80 cents a share on the 3,701,090 shares of common stock outstanding on May 28. Dividends in arrears on the preferred stock on June 1 amounted to $24.06i4 per share, the total amounting to $2,481,012.19. The consolidated balance sheet shows a cash balance of $3,850,844.47 and total assets of $175,610,673.56. The total amount of six per cent convertible debentures, due in 1939, out (Continued on page 33) Safier May Get Post As G.N. Sales Head Morris Safier, one-time general sales manager for Warners, may be appointed general distribution head for Grand National. His appointment will be decided in conferences on the coast late this week with Edward Alperson, president. Mr. Alperson has been in charge of distribution since the recent resignation of Edward Peskay as sales head. Mr. Safier joined the company several weeks ago to assist Mr. Alperson in the reorganization and (Continued on page 33) Eastern Service Has Big Production Gain Business at the Eastern Service Studios in Astoria has shown such a marked upturn since early spring that officials there report they will have more than $1,000,000 in new production this year. Production activities last week included short film releases for Paramount, Universal and RKO, as well (Continued on page 33) MeetsToday with Gillham And McCarthy to Set Advertising Plans Howard Dietz, advertising and publicity director of Loew's, Inc., has been chosen to head the working committee which will conduct the industry's cooperative national advertising campaign this fall. He will meet today with Charles E. McCarthy of 20th Century-Fox and Robert Gillham of Paramount — his colleagues on the working committee — to formulate plans for the launching of the campaign which has for its purpose the focusing of the public's attention on the new season's films. The advertising and publicity directors of other major companies comprise a committee of the whole which will supplement the work of the Dietz-Gillham-McCarthy unit. An agreement to proceed with the campaign was reached on Friday at a meeting at M. P. P. D. A. headquarters attended by major company presidents, sales managers, directors of advertising and publicity and heads of the major circuits. The meeting followed closely on Will H. Hays' advocacy of increased industry advertising in an address last Thursday (Continued on page 3) Cinecolor Starts New Burbank Plant Hollywood, July 17. — Cinecolor has started construction on its new $250,000 plant near the Warner studio. Ground was broken over the week-end by A. J. McCormick, president, with Mayor Frank Tillson of Burbank among the speakers. The two-story building will have 24,000 sq. ft. of floor space and facilities to handle a million feet of film weekly. New Labor Outburst Upsets Mexico Trade By JAMES LOCKHART Mexico City, July 17. — The Mexican film trade is distinctly worried by the new ultimatum which has come as another outgrowth of the long drawn jurisdictional fight upsetting film labor. This time the ultimatum of the Federation of Film Labor to producers and exhibitors threatens to halt (Continued on page 33)