Motion Picture Daily (Jan-Mar 1955)

The News That Is News MOTION PICTURE VOL. 77. NO. 8 NEW YORK, U.S.A., WEDNESDAY, JANUARY 12, 1955 TEN CENTS SEC Okays TO A Film Finance Plan \New Opposition Strategy WASHINGTON, Jan. 11.— The Securities and Exchange Commission today formally cleared the stock-selling proposal of Exhibitors Film Financial Group, Inc., which was formed by Theatre Owners of America for the purpose of financing independent production. Approval by the SEC of EFFG's stock-selling project gives the group the green light for immediate action in putting the plan into operation, Herman Levy, TOA general counsel, said yesterday. The immediate task, he said, is to meet the stock-selling qualifications of each state and that move has been in work for several weeks. It is expected that it will take another two weeks to finish the chore, Levy said. The EFFG trustees will meet shortly to crystalize all plans in connection with the enterprise. No date has been set for the meeting, however. For Second-Runs Eugene Picker Sees Danger in Product Drop By MURRAY HOROWITZ There remains a degree of "maneuverability" in the current product situation for second run houses such as those operated by Loew's, but any further drop in the product output would make the situation "dangerous," it was contended here by Eugene Picker, Loew's vice-president. Picker, interviewed on today's product situation, said his viewpoint would not hold true of third-runs with three changes per week. Today, he said, such an operator is in "trouble." The Loew's executive made his sentiments known in response to a trade assertion that although there have been fewer releases the past year, theatre earnings of this company and other circuits have climbed in comparison to former years. Picker's response was that there (Continued on page 5) $1,200,000 Paid Rubin WASHINGTON, Jan. 11.— Loew's, Inc., paid J. Robert Rubin, who retired as vice-president and general counsel last August, $1,200,000 for his residual rights in M-G-M films, it was disclosed here today by a Loew's statement filed with the Securities and Exchange Commission. The statement, also listing officers' salaries for the year ended Aug. 31, 1954, stated that the payment was in satisfaction of Rubin's rights of 5.1 per cent of the net distribution profits of Loew's pictures produced since 1924, the date when Rubin's employment with Loew's commenced. The residual rights provision, which would have gone into effect upon the termination of Rubin's employment, also covered story properties. The salaries of officers as listed in the Loew's statement for the fiscal year ended Aug. 31 were as follows : Nicholas M. Schenck, president, $224,768 ; Dore Schary, vice-president, $200,000; Howard Dietz, vice-president, $104,286; Leopold Friedman, vice-president, $130,357; Benjamin Thau, vice-president, $189,383 ; Charles (Continued on page 5) N.Y. TAX SETBACK MAY AIDJFILMS Industry Experts Say U. S. Supreme Court Ruling Will Encourage Tests on 'Merits' The U.S. Supreme Court's rejection Monday of New York City's attempt to impose a privilege tax on gross receipts of the United Piece Dye Works of New Jersey Rosenberg Sees No Threat by Toll TV To 1st and 2nd Runs By LESTER DINOFF Subscription television as an entertainment medium will never replace the first and second run theatre in providing a source of amusement to the American public, Frank P. Rosenberg, Warner Brothers contract producer, asserted here yesterday. The subscriber-TV medium will affect the third, subsequent a n d smaller run s i t u a t i on s around the country, accordi n g to the former advertising and publicity executive who said he was aware of the potential value of subscription television as an entertainment medium of the future. Toll-TV will never threaten the first-run or second-run theatres "as the general public wants to seek en(Continued on page 5) F. P. Rosenberg Question Wage-Hour Latv Effect From THE DAILY Bureau WASHINGTON, Jan. 11.— Labor Department officials had some more to say about their plans to expand coverage of the Federal minimum wage law, but still left up in the air just how these plans would affect theatres. If their statements added up to anything, they seemed to add up to this : They would certainly try to bring interstate chains under the law, but might leave out non-chain theatres. The law sets a minimum wage for all covered employes — now 75 per cent — and orders time-and-a-half for overtime. Theatres are exempt under a blanket exemption for retail and service workers. President Eisenhower in his Stateof-the-Union message last week asked Congress to expand coverage. Labor Secretary Mitchell yesterday told a press conference he wanted to bring in retail and service employes. Reporters pointed out that at present the commerce clause in the law makes it apply only to workers "in interstate commerce or producing for interstate commerce" and added that this would not make the law cover many retail or service workers, even if the blanket retail and service exemption were re moved. Mitchell then replied that the Department did not propose to change the commerce clause. But later, Labor Department officials issued a statement in effect correcting the secretary. The Department does propose, the statement said, to ask Congress to broaden the Commerce clause, but does not propose to cover "purely local" enterprises. The upshot seemed to be that for exact details, interested parties would have to wait until Labor Department officials appear before Congressional committees later this year and answer questions as to their specific proposals. raised hopes among motion picture industry tax experts yesterday that any future attacks on tax legislation, including the current suit against the local five per cent amusement tax, will be decided upon the merits of the case. "In the past," a top distribution tax expert said, "we used to hesitate to attack tax legislation because we felt that even if we were technically correct, the courts would rule in favor of the cities merely because of the municipalities' dire need of revenue." The U. S. Supreme Court declined to review a New York State Supreme Court decision that the city cannot levy business taxes upon the gross receipts of an out-of-city corporation engaged in interstate commerce. The distribution tax expert revealed that New York City currently imposes a privilege tax of one-fifth of one per cent on gross receipts and a three per (Continued on page 4) See 1,000 at Drive-in Meet Delegates to Allied States Association's second national drive-in convention in St. Louis next month will receive the first announcement of actions taken by Allied's board on the report of the Emergency Defense Committee. This was revealed yesterday in a bulletin issued by national Allied which predicted that the outdoor operators' conclave this year (Continued on page 5) Schneider Signs New WB Contract WASHINGTON, Jan. 11. — A new five-year contract for Samuel Schneider, vice-president of Warner Brothers, was disclosed here today by a WB filing with the Securities and Exchange Commission. Under the terms of the contract, (Continued on page 5)