Motion Picture Herald (Sep-Oct 1941)

38 MOTION PICTURE HERALD September 6, 1941 CRESCENT DECISION PUT OFF TO DECEMBER 1st December Set for Final Crescent Hearings; R. E. Baulch Dismissed in Nashville Trial Climaxing last week's testimony offered by the defense in the seven-week anti-trust case brought by the United States Government against the Crescent Amusement Company and affiliates, Judge Elmer D. Davies, in Nashville federal court, reached a tentative agreement last Friday with counsel for both sides to delay final arguments until Monday, December 1st. Judge Davies indicated that his decision could be expected shortly after that date. The reason for the three-month postponement is the court's crowded calendar, with only the first week in December available for final hearings in the case. Agreement between the court and counsels provides that defendants have until November 15th to file their briefs. Counsel for both sides have until October 15th to file proposed findings of fact based on the testimony of the last seven weeks. By December 1st, the Government will file its answering briefs and final argument from both sides will ensue. Dismissal Granted Highlight of last Friday was the motion introduced by the defense to dismiss the suit against R. E. Baulch, an official of Crescent and other corporations, which Judge Davies granted, stating that the Government had offered no evidence incriminating Mr. Baulch as an individual. George H. Armistead, Jr., defense counsel, proposed renewal of motions for dismissal of other defendants denied by the Judge on August 8th. When Judge Davies indicated he was not prepared to consider such motions, Mr. Armistead withdrew his proposition, probably on the ground that an outright denial in the record would tend to prejudice to some degree the entire suit. Dismissal of Universal as one of the defendants is pending, resulting from the Court's decision that he must have a brief from counsel on "findings of facts" before acting on the motion. Edward H. Raftery and J. D. Mosby, Universal's counsel, withdrew the dismissal motion but will submit the "findings of fact" and a brief for the court's consideration. It was admitted that Universal remained in the suit only because of the "isolated instance" of the rejected J. D. Henry contract at Union City, as reported in the Motion Picture Herald of August 30th, Page 46. Of utmost significance to the defendants in the suit, indicating Judge Davies ultimate decision in the case, was his statement last Friday, "The distributor has a right to sell his product to any individual or to any circuit and in order for the distributor to make the best possible contract, he has a perfect right to play one prospect against the other." Kermit C. Stengel, president of Rockwood Amusements, Inc., a Crescent affiliate, was recalled to the stand early on Friday by William Waller, Crescent counsel, to introduce the newly-prepared exhibits concerning the proportionate income from popcorn and screen advertising sales and from Saturday revenue from Westerns in small town houses. Mr. Stengel testified that popcorn and screen advertising returned 29 per cenl of Rockwood's net profit in 1939. Mr. Waller followed this testimony with introduction of numerous additional "playoff" sheets and contracts. Joe Wiley, of Hickman, Ky., was the only rebuttal witness on that day. He was questioned by Robert L. Wright, Government counsel, and by Judge Davies. Mr. Wiley's testimony concerned the Universal contract applications of J. D. Henry, his uncle. The witness said he had accompanied Mr. Henry to Memphis in December, 1938, and that Mr. Henry was told by J. A. Prichard, Universal branch manager, that his contracts were there but that Prichard had received instructions from Harry Graham, Southern district manager at Atlanta, not to deliver them. All Universal witnesses previously had testified that the Henry applications never were approved, and that they were finally rejected the last week of December, 1938. Agnew to Testify Neil F. Agnew, vice president of Paramount Pictures, was added to the list of top-ranking distributor officials to testify in the Crescent case, when he appeared last week. Mr. Agnew emphatically denied as others had before him that Paramount Pictures had had any arrangement or understanding with Crescent or any of its affiliates to suppress competition among local exhibitors. Mr. Agnew declared that Paramount considers it to his advantage to have local exhibitor competition of a substantial sort. He also said that there were "certain exceptional circumstances" in the making of Paramount's five-year franchise with Crescent in 1937 and added that it is Paramount's policy now to make new franchises for longer periods than one year. The Paramount executive upheld the longer Crescent franchise, however, as "assuring the distribtuor company a steady, full revenue from situations where no steady revenue had been received in the past." Harry L. Gold, vice president and Eastern sales manager for United Artists, also appeared as a defense witness, describing UA's distributing system and the unique setup of the corporation. He was examined by Mr. Raftery, who queried him in detail concerning negotiations in 1939 with Louis Rosenbaum, operator of Muscle Shoals Theatres, and with Max Buchanan, independent exhibitor in competition with Rosenbaum in Athens, Ala. Mr. Gold testified that United Artists prefers percentage deals, with blanket deals next in preference. Evidence already had been introduced as to UA's "61-situation" and "71-situation" blanket deals with Crescent in 1938-39 and 1940-41, respectively. Mr. Raftery introduced additional exhibits to show that UA had many blanket deals throughout the country. Others who appeared to testify on the same situations were : Lynn Dunn, Atlanta, United Artists' film salesman ; Hugh Owen, Dallas, until recently Dallas branch manager for UA ; T. L. Davis, Atlanta branch manager for UA ; and R. J. Barnes, UA film salesman. At conclusion of this testimony, it appeared to some court observers that Robert L. Wright, Government counsel, who had contended that the United Artists-Crescent "61-situation" deal was illegal because it involved subsidiaries not entirely owned by Crescent, had lost his point, judging from the reactions of the court. Rubinslcy Promotes Poorman Charles Poorman has been promoted to road manager for the Mark Rubinsky houses in upstate eastern Pennsylvania. He was formerly manager of the independent circuit's Hollywood Theatre in St. Clair and the Lyric in Newmanstown. The circuit also includes the Lyric in New Philadelphia and the Lyric in Williamstown. Urges Sponsored News for South American Radio Axis propaganda in South America via newsreels, radio and the press "is on the run", according to John F. Royal, vice president in charge of international affairs for the National Broadcasting Company who returned on Monday from a sevenweek plane trip to Latin America. Mr. Royal told reporters that one of the best ways to combat Axis propaganda activities and win over the majority of South American countries which, in his opinion, "now show increasing tendency toward the democracy's point of view", is for "American business men to sponsor shortwave news broadcasts" to the republics below the Rio Grande. "The United States", he said, "must find a way to get more objective news without further delay to South America, on a sponsorship basis. Axis powers are spending money for their own purposes. The United States must also spend money to combat this propaganda." Urged by reporters to reveal, whether in his opinion, American business men, the Government, or semiGovernment agencies such as the Nelson Rockefeller committee, should spend the money, Mr. Royal refused to commit himself, saying, "At this'time, it doesn't matter to me who sponsors such programs. All I'm interested in right now is that somebody should do it." Signed Stations Mr. Royal visited Cuba, Puerto Rico, Trinidad, Brazil, Uruguay, Argentina, Chile, Bolivia, Peru, Ecuador, Colombia, Panama and Costa Rica, for the purpose of signing up in gentlemen's agreements 92 South American radio stations on an NBC Pan-American network. The NBC project followed closely upon the heels of Columbia Broadcasting System's contracts with more than 100 South American radio stations. As outlined by Mr. Royal, the "gentlemen's agreements," in effect, provide for NBC to sell time on the 92 South American stations, either on an independent or network basis, to American business firms, with certain "financial" specifications. The Latin American stations, in turn, will provide NBC with the necessary time. The agreement also provides that NBC will "deduct from the station's 'card' rate, 15 per cent for agency commission and an additional 15 per cent for NBC's overhead and operating expenses, which would give the stations a net of 70 per cent of whatever revenue accrued as a result of a commercial tie-up through NBC." Mr. Royal indicated that the agreements would operate to decrease Axis propaganda, pointing out, however, that while there is no stipulation specifically worded to this effect, that American business firms will not broadcast programs on those stations using Axis news services or disseminating Axis propaganda or having any alleged connection with Axis countries. He added that NBC would "do business only with those stations which refuse Axis business." The first Pan-American Network program, scheduled for this Sunday, September 7th, will dedicate the Brazilian network affiliation with NBC on a special show celebrating the Brazilian nation's independence. On September 18th, the Mexican network will be dedicated and the third NBC-South American radio tieup is slated for October 12th, Columbus Day, when the combined Central and South American networks will be dedicated.