The Exhibitor (1954)

MOTION PICTURE EXHIBITOR 7 Johnston Asks Changes In industry Taxes MPEA Head Asks Treasury For Foreign Earnings Credit, Exemption For Profits Of Foreign Films Washington — in two letters sent last week to Dan Inroop bnnm, assistant to Ireasury Secretary numpiirey, relating to the him industry s tax situation in toreign countries, line Johnston, president, Motion Picture Exporters Association, sug¬ gested amendments to present tax bills which would aid American him exporters. Urging the Treasury Department to in¬ clude the him industry in the 14 per cent tax credit allowed certain businesses on foreign investment earnings, Johnston called the present bill unfairly discrimina¬ tory to the industry. Johnston expressed the desire that “a greater awareness of the exact nature of our business and our problems abroad will be manitested in proposing again a 14-point tax credit on loreign investment holdings.” Calling attention to the industry’s heavy foreign investments and far hung opera¬ tions, Johnston wrote, “To compare these investments and operations with a branch bank or an air transportation office in a single large city of some foreign country is utterly unrealistic.” He added that “the provisions of last year’s tax bill discrim¬ inated against an American business oper¬ ation that met all of the tests laid down for eligibility for the credit.” Johnston also proposed the exemption of foreign him producers and distributors from the 30 per cent withholding tax now imposed on their him rentals in the United States. He called the withholding tax “an open invitation to foreign gov¬ ernments to retaliate against American companies by unfairly taxing their opera¬ tions abroad.” He added that the tax is based on the “fantastic misconception that 60 cents out of every dollar of him rental is not proht.” According to Johnston, the tax yields little revenue, and the treasury would collect larger income tax payments from United States companies if these com¬ panies were granted reductions from tax payments abroad. He also desired that the industry be taxed on net income and not on an arbitrary percentage of gross income. President Eisenhower, in a recent spe¬ cial foreign trade message to Congress, requested that United States companies be taxed on certain overseas income at 14 percentage points less than the rate on domestic income. Last year’s treasury proposal excluded him companies from these benehts, and the President’s message gave no indication as to whether the Treasury had changed its views. Film Sale To TV Cleared Hollywood — The injunction prohibiting Republic from releasing 85 Roy Rogers hlms to television was vacated last week by Federal Judge Pierson Hall. Hall’s de¬ cision in the Rogers-Republic case was recently reversed by the Ninth Circuit Court of Appeals. Toll-TV Committee Meets To Map Strategy NEW YORK — ^The first meeting of the full membership of the joint com¬ mittee on Toll-TV will be held today and tomorrow (Jan. 19-20) at the Sheraton Astor Hotel. The committee, headed by Trueman T. Kembusch and Alfred Starr as cochairmen, will map anti-toll-TV cam¬ paign strategy, with eyes upon the Congress and the Federal Communi¬ cations Commission. The meeting will also deal with the campaign’s financ¬ ing. It is expected that the committee will implement its demand that pro¬ ducers stand up and be counted on the toll-TV issue. In addition to Rembusch and Starr, the committee consists of Philip F. Harling, Fabian Theatres executive; James Arthur, Cabart Theatres Cor¬ poration; and Abram F. Myers and Herman M. Levy, general counsels of National Allied and TOA respec¬ tively, who make up the committee’s legal advisors. Franchise Bids Kept Secret Chicago — Ted Lietzel, head of public I’elations, Zenith Radio Corporation, last week flatly refused to identify exhibitors said to have applied for franchises to op¬ erate Phonevision in their localities. He also refused to state how many exhibitors were involved and in what localities they were. Lietzel was queried in connection with the assertion of Commander E. F. McDon¬ ald, Jr., Zenith president, that if Phonevision is approved by the FCC, a number of theatre owners have already applied for franchises. The financial participation of Theatre Owners of America in the fight against toll-TV was one of the subjects of a meeting held between E. D. Martin, president, Walter Reade, Jr., former presi¬ dent, Herman Levy, TOA general counsel, and Leonard Goldenson, president, Amer¬ ican Broadcasting-Paramount Theatres. TOA, along with Allied States Associa¬ tion, is a member of the joint exhibitors committee on toll-TV. The exhibitors’ committee is fighting to prevent quick FCC approval of toll-TV. //VP E .X Volume 53, Number 12 January 19, 1955 Section One Editoriai . 5 New York By Mel Konecoff 6 The International Scene 10 About People 16 This Was The Week When 16 In The Newsreels 17 Better Management 18 Studio Survey . SS-1 — SS-1 Section Two The Servisection . SS-1 — SS-8 Loew’s Asks Delay For Stock Shuffle New York — Loew’s filed a petition last week with the District Court here asking for a postponement of two years in the deadline for distribution of stock in the new theatre company. The two-year ex¬ tension was provided for in the consent decree, if the company was unable to divide its funded debt between the pro¬ duction company and the new theatre company, and could not get similar financ¬ ing to replace it. The deadline was Feb. 6, 1954. Justice Department officials claim that they are prepared to tell the court that they have found nothing to dispute in Loew’s claims, and that though the de¬ cision on facts is up to the c®urt, if the court decided for Loew’s the extension is automatic. The Loew’s petition said that the pres¬ ent holders of the debt do not want to divide the debt, on the grounds that the present debt is backed by the assets of production, distribution, and exhibition, whereas the parts of the divided debt will be backed by only part of the company’s assets. The present debt is at an ex¬ tremely low interest rate, which would not be duplicated in any new financing. Only the stock in the new theatre com¬ pany is involved in the two-year ex¬ tension. Circuit Appeal Denied Washington — The appeal of Fanchon and Marco, Inc., against the Ninth Cir¬ cuit Court of Appeals decision throwing out its anti-trust suit against eight dis¬ tributors, National Theatres, and Fox West Coast Theatres was denied last week by the Supreme Court. Fanchon and Marco claimed that the defendants had conspired to deny firstruns to its Baldwin, Los Angeles, but both the Los Angeles District Court and the Circuit Court found for the defendants in the action. Last Movie Holdout Succumbs New York — Government officials of the Sheikdom of Kuwait have lifted a ban against the medium and authorized the formation of a company to build theatres and import films. This will permit the 200,000 residents to see motion pictures for the first time. The indepedent state is located on the Persian Gulf and was be¬ lieved to be the last holdout against film entertainment. NT Deadline Extended Washington — National Theatres last week was given another extension of its divesture deadline under the original 20thFox consent degree. The new interim ex¬ tension was until Jan. 31 to allow Justice Department officials and National The¬ atres executives time to work out a final order for carrying out the remaining di¬ vestiture. At the end of last month, NT still had 10 theatres to divest. January 19, 1955