Motion Picture Daily (Oct-Dec 1944)

Motion Picture Daily Tuesday, December 12, 1944 Higher Booth Equipment Quotas in '45 (Continued from page 1) some time here between Allen G. Smith, chief of the WPB theatre equipment section, and representatives of the military and other agencies for which equipment is earmarked, resulting in arrangements whereby the over-all total of production will remain at its present level, but Government claimants with no immediate need for all the equipment reserved for them will release the unwanted portion for theatres. Equipment manufacturers are being advised of the increased theatre quotas, but are being warned that if the war programs or the labor situation require, the allocations as between companies will be shifted. As WPB made preparations for the coming quarter's industrial activity, materials supply reports showed that the copper situation is again becoming very critical, due to ammunition programs, that electronic components are still tight, but that the steel supply has improved, except in the case of alloys, and that the bearings and small motors situation is better. So far as booth equipment manufacturers are concerned, however, the situation is less critical than in other industries, due to the high priorities they hold for the procurement of copper. The situation with respect to that metal, however, will justify an investigation of the copper-salvage drive to secure the reclamation of all possible copper from carbons. DeHavilland Upheld In Contract Test Los Angeles, Dec. 11. — The Sec ond District Court of Appeals has up held the Superior Court ruling that Olivia DeHavilland does not owe Warners 25 weeks' services under a contract which the studio had contended was valid 25 weeks beyond its seven-year calendar period due to time out for suspensions, and other absences. The decision was based on the judicial view that protraction would violate the California labor code, adding that "rights created in the public interest may not be contravened by private agreement." It is believed Warners will appeal the State Supreme Court decision. The case is considered a precedent important with respect to all studio em ployment contracts. "Life" Likes 'St. Louis* In selecting "Meet Me in St. Louis' as its current "movie of the week," Life also gives the cover of the Dec. 11 issue to the star, Judy Garland, while four inside pages carry information on the picture. twki.a-Cmt \ / N.T.C otuvHf tfivict V y Co, 6-0081-2-3-* (TOtAfil t C A. ncUKIION tOOM RLM CXCtWtOI PUtUiUllON SUVKl Supreme Court Upholds U.S. in Crescent Appeal (Continued from page 1) their claim that the Government's first appeal was premature to be well founded. It refused, however, to dismiss the Government's second appeal, received at the same time as the first. The court's opinion, delivered by Associate Justice Douglas, represented the views of five members, Asociate Justices Frankfurter, Murphy and Jackson taking no part in the consideration of the case and Associate Justice Roberts dissenting, but without making his views known. Sherman Act Applies Justice Douglas, early in his opinion, disposed of all doubts as to the applicability of the Sherman Act to the exhibition business, pointing out that contracts made by theatres with film salesmen are subject to approval by the distributors' home offices and that the films are shipped to the various exchanges and by them sent from one exhibitor to another. "The findings are wholly adequate to establish that the business of the exhibitors involves a regular interchange of films in interstate commerce," he commented. The opinion dealt at length with the practices which the Government charged the defendants resorted to for the purpose of eliminating competition. "There was ample evidence that the combination used its buying power for the purpose either of restricting the ability of its competitors to license films or of eliminating competition by acquiring the competitor's property or otherwise," Justice Roberts said, citing the companies' insistence that a distributor give them monopoly rights in towns where they they had competition or be refused business in the closed towns where they had no competition, and the franchise contracts which they made, including a repeatrun clause which prevented the sales of a second run to opposition theatres. 'Normal Competition' "We are now told, however, that the independents were eliminated by the normal processes of competition; that their theatres were less attractive; that their service was inferior; that they were not as efficient businessmen as the defendants," he continued. "We may assume that if a single exhibitor launched such a plan of economic warfare he would not run afoul of the Sherman Act. But the vice of this undertaking was the combination of several exhibitors in a plan of concerted action. They had unity of purpose and unity of action. They pooled their buying power for a common end. It will not do to analogize this to a case where purchas ing power is pooled so that the buyers may obtain more favorable terms. The plan here was to crush competition and to build a circuit for the exhibitors." The opinion dismissed the companies' contention that the lower court's findings were mainly taken verbatim from the Government's brief, although Justice Douglas criticized them as leaving "much to be desired in light of the function of the trial court." "But they are none the less the findings of the District court," he said, "and they must stand or fall depending on whether they are supported by evidence. We think they are." Granting the Government's petition for broadening of the decree to require af firmative showing that proposed acquisi tions will not be contrary to the require ments of the decree, Justice Douglas pointed out that the court normally is reluctant to direct a recasting of a decree except on a showing of abuse of discretion, but said that this was a case where it should act lest the public interest not be adeouately protected. "The generality of this provision of the decree bids fair to call for a retrial of a Sherman Act case any time a citation for contempt is issued," he explained. "The crucial facts in each case would be subtle ones as is usually true where purpose and motive are at issue. This type of provision is often the only practical remedy against continuaiton of illegal trade practices. But we are dealing here with a situation which permits of a more select treatment. The growth of this combine has been the result of predatory practices condemned by the Sherman Act. The object of the conspiracy was the destruction or absorption of competitors. It was successful in. that endeavor. The pattern of past conduct is not easily forsaken. Where the proclivity for unlawful activity has been as manifest as here, the decree should operate as an effective deterrent to a repetition of the unlawful conduct and yet not stand as a barrier to healthy growth on the competitive basis. The acquisition of a competing theatre terminates at once its competition. Punishment for contempt does not restore the competition which has been eliminated, and where businesses have been merged or purchased and closed out it is commonly impossible to turn back the clock. . . . 'Revise Decree' "The considerations impel us to conclude that the decree should be revised so as to prohibit future acquisitions of a financial interest in additional theatres outside of Nashville, except after an affirmative showing that such acquisition will not unreasonably restrain competition." Dealing with the companies' charges that the decree was unduly severe, Justice Douglas dismissed the contention that the injunction against the making of franchises or film contracts protecting them against competition would "aggrandize" the distributors, commenting that these were the chief weapons used by the combination in its unlawful warfare and "the fact that those instruments could be lawfully used does not mean that the defendants may leave the court unfettered. "Civil suits under the Sherman Act," he said, "would indeed be idle gestures if the injunction did not run against the continuance or resumption of the unlawfu1 practice. And it is hard to see how the decree could be made less general and more specific." Justice Douglas expressed little sympathy for the companies' contention that the divestiture provisions of the decree are inequitable and harsh, income tax-wise, that they exceed any reasonable requirement for the prevention of future violations and that they are therefore punitive. "The court has quite consistently recognized in this type of Sherman Act case that the Government should not be confined to an injunction against further violations," he said. "Dissolution of the combination will be ordered where the creation of the combination is itself the violation. Those who violate the Act may not reap the benefits of their violations and avoid an undoing of their unlawful project on the plea of hardship or inconvenience. 'Fruits of Conspiracy' "That principle is adequate here to justify divestiture of all interest in some of the affiliates since that acquisition was part of the fruits of the conspiracy. But the relief need not, and under these facts, should not be so restricted. The fact that the companies were affiliated induced joint action and agreement. Common control was one of the instruments in bringing about unity of purpose and unity of action and in making the conspiracy effective. If the affiliation continues there will be tempting opportunity for these exhibitors to continue to act in combination against the independents, The proclivity in the past to use that affiliation for an unlawful end warrants effective' assurance that no such opportunity will be available in the future. Hence we do not think the District court abused its discretion in failing to limit the relief to an injunction against future violations. There is no reason why the protection of the public interest should depend solely on that somewhat cumbersome procedure when another effective one is available. "The fact that minority stockholders of the affiliated companies are not parties to the suit is no legal barrier to a separation of the companies. No legal right of one stockholder is normally affected if another stockholder is required to sell his stock. And no exception to that rule has been shown to exist here." Dudley Gets 'Daily Double' on Winners Radio Announcer Bernard Dudley rode a "daily double" with Motion Picture DailyFame radio poll winners last Sunday. Dudley was the announcer on the CBS broadcast of the New York Philharmonic Orchestra which featured an announcement that the orchestra had been voted "Best Symphonic Orchestra." He was also the announcer on Mutual Broadcasting's "Dick Brown Program," another poll winner. NTS Buys $250,000 In Bonds for Sixth National Theatre Supply, division of NationalSimplex-Bludworth, Inc., has purchased $250,000 worth of war bonds to be credited to the industry for the Sixth War Loan, Harry Brandt, national industry chairman for the drive, reported here yesterday. Today to Be Lambs' Day in Times Square Today will be Lamb's Day at the industry's "Statue of Liberty" in Times Square, and several of that club's members are to appear on behalf of the Sixth War Loan, including James J. Walker, former mayor of New York City. Harry Arthur's Suit Again Is Postponed St. Louis, Dec. 10. — Harry Arthur's suit seeking an injunction against the Department of Justice's consent decree and damages against film companies has again been postponed in Federal District Court here. The defendants were granted until Jan. 16 in which to file their answer to the suit. A hearing on the Rosecan arbitration case is set for Jan. 15, but will probably be postponed beyond that date. Several companies named in the clearance complaint of Adolph Rosecan, operator of the Princess Theatre, seek to avoid submitting to arbitration. Sudekum May Not Seek Re-Hearing (Continued from page 1) prompted the trouble and expense to which the Crescent Amusement Co. has gone in defending itself against the Governments' prosecution. The greater part of Sudekum's business is in the city and in the suburbs of Nashville, and this was excluded from the suit in the very beginning. Sudekum has already revealed plans for the postwar construction of new theatres in Nashville and the suburbs that will probably more than offset the value of the interests (not exceeding 50 per cent in any of the affiliated circuits) that the courts are demanding him to dispose of. REEVES SOUND STUDIOS, INC. 1600 BROADWAY. N. Y. 19 Circle 6-6686 Complete Film and Disc Recording Facilities