Motion Picture Herald (Nov-Dec 1944)

U. S., MAJORS JOIN TO DEFEND DECREE Unite on Fourth Birthday to Fight Intervention by Outside Interests As the fourth anniversary of the Consent Decree was reached this week, the truce between the United States Government and the "big five" faced possible termination or drastic modification of terms. The document was signed November 20, 1940, by Federal Judge Henry W. Goddard, in the U. S. District Court, New York. Although the Department of Justice and the majors have been at loggerheads on many points of the Decree during its operation, both sides will unite in defense of its legality against the attacks by Harry Arthur, Jr., who will question the Decree's constitutionality in the New York court. Thereafter, if the court refuses to permit Mr. Arthur's intervention, or rejects his arguments, the Department of Justice will proceed with its petition for modification against the objections of the consenting companies. The Decree was entered into by the Department of Justice and Paramount, Metro-Goldwyn-Mayer, RKO, Twentieth Century-Fox and Warner Brothers, thus temporarily ending the Government's anti-trust action against the defendants, initiated by the original bill of complaint filed by the U. S., July 20, 1938. The action was officially. United States vs. Paramount, et al. Columbia, Universal and United Artists, also defendants in the original suit, did not sign the decree. No Application for Relief All the provisions of the Decree became effectively immediately, except Sections HI and IV, dealing with trade showings and licensing in blocks of five. These sections went into operation in the 1941-42 selling season the following August-September. Although it had been provided that the five consenting companies could be relieved of these limitations after June 1, 1942, if no decree was entered against the "little three" prior to that date, the defendant companies made no application for relief from those provisions. Section XXI provided for a three-year trial period in which the Government agreed not to seek the divorcement of production and distribution from exhibition, in consideration of the agreement by the consenting companies, Section XI, to notify the Department of Justice of any legally binding commitments for the acquisition of additional theatres, and to refrain from a general program of expanding theatrical holdings. The Government, August 7, 1944, filed in the U. S. District Court, New York, its petition for the modification of the Decree, under Section XXIII (d), which provides that any of the parties to the Decree may at any. time more than three years after its entry date, apply for any modification thereof. Trade Practice Policy Outlined The trade practice policy which the Government then proposed for incorporation into the Decree included: The compulsory trade showing of all features and the selling of all features unconditionally and singly; a proliibition against the forcing of shorts, Westerns, trailers, news reels, reissues and foreign features, and the elimination of the conditioning of feature sales to one theatre upon sale to another. Also requested was the compulsory granting of some runs and cancellation on local moral, religious and racial grounds. Unreasonable clearance was to be defined as any which "unreasonably restrains competition," and the arbitrator was to be given the power to eliminate clearance in a given case. In addition, it was asked that provision be made for arbitration, for money damages, of any alleged discrimination violating the Sherman Anti-Trust Act; divorcement of distribution from exhibition; the barring of pooling agreements, and the voiding of franchises entered into by the defendants. Also, rental terms to affiliated theatres were not to "unreasonably restrain competition." No Hearing Date Sought No date was then asked by the Government for a hearing of its modification petition. Thereafter, September 18, Harry Arthur, Jr., and the St. Louis Amusement Company served notice of motion to intervene in the case of the United States vs. Paramount et al, in the U. S. District Court, New York. The Department of Justice and the consenting companies were notified that a hearing on this petition would take place November 3. In the intervention petition, Russell Hardy, counsel for Mr. Arthur, contended that the Decree was illegal in that the court had usurped judicial and legislative powers and transferred them to the American Arbitration Association, the administrator of the Decree. Mr. Hardy's petition asked that the Decree be vacated or that the Arthur interests in St. Louis be exempted from its operation. November 1, Mr. Hardy filed suit in the Federal District Court, St. Louis, asking the court to restrain the hearing by the Arbitration Association tribunal there of the clearance complaint brought by Adolph Rosecan, operator of the Princess theatre. Mr. Rosecan had sought more favorable clearance for his theatre and had named theatres in Mr. Arthur's circuit as interested parties. In the same action, Mr. Hardy asked $285,000 in treble damages, alleging the plaintiffs had suffered damage to the extent of $95,000 by reason of an Arbitration Association award which reduced the clearance in favor of the Apollo theatre, St. Louis. Hearing Set for December 5 Both the Government and the consenting defendants will argue against the intervention of Mr. Arthur when the hearing of his petition, postponed from November 3, takes place before Judge Goddard December 5. The companies will urge that Mr. Arthur has no right to intervene under Rule 24 of the Rules of Civil Procedure ; that if he has such a right, the court should not permit intervention on the ground that he has not a specific interest; and that, lastly, again assuming the right, his appearance in the case is not timely because of the long lapse of time since the beginning of the arbitration system. Whether the court grants the modifications of the Decree requested by the Government, or vice versa, the loser is expected to appeal, and a long legal battle, terminating in the U. S. Supreme Court, is anticipated. Thus far, no counter proposals have been made by the com panies, and the Department of Justice is e pected to be adamant in pressing its deman> for divorcement. Meanwhile, the defendants in the St. Lou suit have been granted an extension until D cember 9 in which to file their answers. Als the U. S. Supreme Court, which recessed Mo' day without passing on the Crescent Amus ment Company anti-trust case, on which heard arguments November 6 and 7, may haan opinion ready to hand down on the cros appeals when it reconvenes December 4. To Use Blocke A frican Funds fo Paris Branches Major companies are waiting permission fro the French Government to transfer funds repr senting rentals accumulated in North Africa in th past 18 months to banks in Paris, the Frenc Information Service disclosed in New York Mo' day. Application to the U. S. Treasury Depar ment for authorization of this move also has bee made by the distributors. The funds, which have been frozen in Nort Africa, are to be used, at least partially to hel finance the physical reestablishment of the Ameri can companies in France, it was indicated. Ac cumulated in the liberated territories of Nort Africa since the Allied invasion in November, 194 the money is estimated at upwards of 150,000,00 francs, valued currently at two cents per fran This would amount approximately to $3,000,00 if this rate of exchange obtains. Thus far, major companies have no idea ho much money has accrued to them in Sicily an Italy. The Army's Psychological Warfare Divisio and the overseas film division of the Office o War Information handle distribution in the areas Reports on American grosses in Italy have bee supplied by the OWI to the major companie foreign department executives disclosed, but sue information has been sporadic and not all-inclusive The most recent gross report to come from th OWI was last week, when United Artists learne that Charles Chaplin's "The Great Dictator' rolled up a gross of 5,500,000 lira, equal to $55,000 if the rate of exchange, one cent per lira, is main tained. Following its initial showing October 22 at th Barberini theatre, Rome, to a $2 top for the benefi of the local Red Cross, the Chaplin comedy wa released generally in Rome, Naples, Florence an Bari November 3. It played four houses simultaneously in Rome the Corso, Splendore, Moderno and Quirinetta and took in a combined gross of 4,200,000 Hra th first four days. For the first six days in Naples at two theatres, it grossed 1,300,000 lira. I Florence, the picture played at two theatres an garnered 1,200,000 lira and in Bari, at one house, it grossed 800,000 lira. According to the OWI, th film is expected to run at least four weeks i Rome. Warner Brothers Setting Up South African Distribution Warner Bros, soon will start distribution of its own product ih the South African market, with Jerome P. Sutten as manager of that territory, it was announced last week by Joseph S. Hiimmel, vice-president of Warner Bros. International Corporation. Mr. Sutten, at present in New York awaiting transportation to his new post, is familiar with the South African field, where he was engaged in distribution for the past six years. A Warner branch office will be established in Johannesburg by Mr. Sutten immediately upon his arrival. Pollack Joins RCA Victor Al Pollack has joined the theatre equipment section of the RCA Victor division. Radio Corporation of America, Camden, N. J., as product man in charge of motion picture rectifiers and generators, it was announced this week. IB MOTION PICTURE HERALD, NOVEMBER 25, 1944