Motion Picture Daily (Jul-Sep 1940)

"II Monday, July 22, 1940 Motion Picture Daily 5 Tentative Consent Decree Draft Ready Circuits Can't Overexpand Para. Associates Discuss Decree Effect on Theatres Escape Clause, Arbitration l r Under Decree ' jgW (Continued from page 1) agree not to pursue a general nation> wide policy of expanding theatre hold" ings. Any time during this period, however, that a defendant shows it must pursue such a national policy of expansion in order to protect its competitive position in the industry, the defendant can apply to the Federal j courts to make this non-aggression pact inoperative. Under this agreement, the defendants must report to the Department of ! Justice, on or before the 10th of each month, any changes or altered interest in their theatre operation which have occurred during the preceding month. This information is to be kept inviolate by the Department of Justice, which, however, reserves the right to seek to enjoin any defendant from acquiring or replacing any theatres, if the Department of Justice feels that the public interest so requires. The defendants are free to oppose such an injunction. This "non-aggression pact" is similar in effect to a standstill agreement which now exists between the companies and the Department of Justice on theatre expansion. Neely Not Insisting On Original Terms Washington, July 21. — Senator Matthew M. Neely of West Virginia, author of the block booking legislation, is understood to be willing to accept any sort of measure the House produces on block booking and will not insist on adoption of the plan in his bill as it passed the Senate last year. Congress will reconvene tomorrow after a 10-day-recess for the Democratic National Convention, but no action is expected to be taken this week with respect to the Neely booking bill. Under a "gentlemen's agreement" entered into in both Senate and House before the recess, no legislation of any importance is to be taken up until July 29, and it is probable that the two Houses will meet tomorrow merely to recess for three days, repeating that action on Thursday. James Roosevelt Leaves for Coast James Roosevelt left for the Coast over the weekend to start preparations for "Pot o' Gold," his first production for United Artists release. Henry Henigson, production manager for Roosevelt, will leave for the Coast today or tomorrow after supervising the recording of Mrs. Eleanor Roosevelt's prologue to "Pastor Hall," Roosevelt's first release. Atlantic City, July 21. — Changes in affiliated circuit operating methods suggested by current proposals for a consent decree in settlement of the Government's New York anti-trust suit were the principal topic of discussion by Paramount home office officials and theatre operating associates at a weekend meeting at Hotel Haddon Hall here. Tentative decree proposals for decentralized buying of product in groups of five without a cancellation right were studied by the theatre executives with a view to determining whether such restrictions were feasible or threatened to impose too severe problems on operations. Other consent decree proposals, such as open bidding for product, arbitration and clearance, also came in for study and discussion. It was indicated at the meeting that numerous recommendations will be made by home office theatre executives to Paramount counsel as a result of the discussions, and these suggestions may be the subject of later negotiations between defense counsel and Government attorneys on the pending decree. U. S. to Ask Court For Short Delay Of Trial Today Government attorneys expect to ask another short postponement of the trial of the New York anti-trust suit at the scheduled hearing before Federal Judge Henry W. Goddard today. Indications are that a date will be sought which would permit another hearing, if one is required, before Judge Goddard leaves on vacation around Aug. 1. No meetings on the proposed consent decree were held on Friday as Government attorneys were in Washington to report to and confer with Thurman W. Arnold, assistant U. S. Attorney General, on the progress of the negotiations. The next joint meeting of Government and defense counsel is scheduled for tomorrow, when the settlement negotiations will be resumed. It is expected that a lengthy postponement of the trial, probably until late September or early October, will be asked before Judge Goddard leaves on his six weeks' to two months' vacation, and that the negotiations will continue throughout most or all of that time. The meeting here was a continuation of the sessions recently held at Old Point Comfort, Va., and in Chicago. The partners left tonight for New York where they will resume discussions. Meetings will be held tomorrow and Tuesday, at which it is expected all home office officials will participate. Among those attending the meeting here were : Barney Balaban, Paramount president ; Austin C. Keough, Paramount general counsel, and Neil F. Agnew, general sales manager ; Leonard Goldenson, Leon Netter and Sam Dembow, home office theatre executives ; E. V. Richards, head of Saenger Circuit, New Orleans ; R. J. O'Donnell, Interstate Circuit, Dallas ; A. H. Blank, Tri-States Circuit, Des Moines ; R. B. Wilby and H. F. Kincey of WilbyKincey Circuit, Charlotte and Atlanta; E. J. Sparks, AllFlorida Circuit, Miami ; M. A. Lightman, Malco Theatres, Memphis ; Hunter Perry, Paramount-Virginia Theatres, Charlottesville ; Julius Gordon, Paramount-Texas Theatres, Beaumont, and Fred Kent. Pact Would Place Sales Refusals On Distribution (.Continued from page 1) men, would bring about complete revision of present methods of distribution and theatre operation. Under the proposal in the present draft, every theatre is designated as a run, and a complaining exhibitor may claim that a distributor is withholding product he needs. If his claim is upheld by an arbitration board, this product may be taken away from the theatre to which a distributor has sold it and be granted to the complaining exhibitor. The proposal specifies that a distributor shall not refuse to sell pictures to a run if the exhibitor is reputable and responsible and satisfies minimum standards of operation, unless the granting of a run to such an exhibitor will prejudice the distributor's business interests in the particular area where the complainant's theatre is located. If the distributor is found guilty of doing so, it is provided that the product may be taken away, even after sold to another, and granted to the complaining exhibitor, and that the burden of justifying the sale is upon the distributor. Still Pending (Continued from page 1) forward their suggestions and amendments. Divorcement has been removed as an issue in the proceedings, apparently, as the draft contains no provision in this regard. Chain operation, affiliated and otherwise, is left undisturbed. Overexpansion, on a national scale, is forbidden. There is embodied in the draft a specific proposal with respect to the acquisition of and changes in theatres in which the defendant companies are interested. Arbitration with "teeth" is called for, although no plan of operation or any machinery design for an arbitration system has been embodied in the draft, thus far. It is anticipated that this will be one of the next steps to be taken up by the negotiators, once the present proposals have been thoroughly and definitely agreed upon. Violation of an arbitration award makes the guilty party subject to a claim for damages. Blind selling is eliminated. Trade showings are provided for before pictures are offered for sale. Notice of trade showings must be published in the trade papers. Block booking is remedied. Unit sales are provided for. It is proposed to sell pictures in groups of five. The sale of one group shall not be conditioned upon the purchase of another group or any part of it, it is provided. Local buying is specifically proposed. Overbuying is prohibited. Discrimination and preference runs are prohibited. Forcing of shorts, newsreels, trailers, westerns, serials and foreign-made pictures is outlawed. Clearance is subject to arbitration. Exhibitors are granted the right of cancellation of any picture which is offensive on moral, religious or racial grounds. Initiation Fee for Publicists' Guild An initiation fee of $1 per month retroactive to Nov. 1, 1939, will be instituted on applicants for membership in the Screen Publicists Guild of New York after Aug. 1. Applicants prior to that date will not be affected. The Guild will hold a subscription dance at the Hotel Pierre, Aug. 9, the proceeds of which will be used to defray expenses of sending delegates to Hollywood for a meeting with the West Coast publicists' guild, at which a constitution for the joint organization will be adopted. Forms Band Agency Cincinnati, July 21. — General Amusement Corp. has opened a branch office in the Carew Tower here, and will supply name bands and acts. Robert Weems is branch manager. Goes Back to Stage to Pay for Film Mexico City, July 21. — The case of a veteran stage actor having to go back to the boards to raise funds to complete his first motion picture is that of Roberto Soto, easily this country's most corpulent actor. Soto was half through the picture when he found himself zvithout funds to continue, although, it was reported, he had obtained a Federal Government subsidy for the film. The comedian is now heading a revue company at the old Teatro Lirico here, where Lupe Velez got her start. i