Motion Picture Herald (Mar-Apr 1945)

SENATORS TO STUDY Paramount Year MONOPOLY PLAINTS Net Is Estimated At $16,488,000 Small Business Committee Plans Investigation of 'Squeeze" Charges Pending for several months, an investigation of charges of monopoly in motion picture exhibition will be undertaken shortly by the Senate Special Committee on Small Business, Senator James E. Murray of Montana, chairman, announced Friday of last week in Washington. The inquiry would be based on what the committee head described as the necessity "to make certain that the field of motion picture exhibition is open to all competitors on equal terms" and that "returning men of the armed services be given their fair chance to open and successfully operate motion picture theatres." It would cover principally the practices of the major distributors with theatre affiliates, taking up allegations that they were putting the "squeeze" on independent exhibitors. Based on Montana Suit The springboard for the inquiry decision apparently was a complaint from the Park-Butte Theatre Company, operator of the Montana and Park theatres in Mr. Murray's home town of Butte, Mont. Charges in the Senator's announcement were taken largely from the language of the bill of complaint in the suit filed by the theatre company Feb. 8, 1945, in Butte. It was lodged against National Theatre and subsidiaries, nine distributors and five individuals, claiming violation of the anti-trust laws and conspiracy to deprive the company of product for its two theatres. Injunctive relief, triple damages to a total of $1,224,000, and costs were asked. Mr. Murray said that he had received complaints from other independent exhibitors. The committee's attention to motion pictures is said to have been encouraged by Dewey Anderson, executive secretary. Mr. Anderson is not new to industry contact. He was executive secretary of the Temporary National Economic Committee in 1941 when it issued a series of monographs on an investigation, of the economic control of the industry. The reports were designed to show that control was exercised by a few individuals and corporations. One of them was entitled "The Motion Picture — A Pattern for Control." Mr. Anderson has been instructed to make a survey of all complaints, conduct the necessary staff studies of the problems involved and report his findings to the committee for action. Open hearings will be held only "if necessary," Mr. Murray explained. Charge Unfair Preference Complaints to the committee, according to Mr. Murray, charge that the five theatre-affiliated distributors give unfair preference to their theatres in respect to choice of films, playing time, price and numerous other factors. Investigation of large independent circuits is indicated in the citation of complaints that they use their purchasing power to obtain preferential treatment over small exhibitors. Charges filed by his home-town theatre constituent were described by Mr. Murray as typical of other communications. "The latest complaint from Butte," he said, "charges that nine out of the 12 theatres formerly existing in Silver Bow County, Mont., had been absorbed by the major companies or forced out of business by their competition until only three theatres remained in Butte in 1932, all owned by one major producer-distributor." The complaint charged that when the Park-Butte Theatre Company opened a theatre there in 1932 for second run films the circuit changed the run policy to "hamper and restrict" the operation, and overbought to deprive the theatre of film. Claim Action in Concert "In connivance with other major producerdistributors, the complaint charges, one major producer-distributor deprived the independent theatre owner of free access to second run product," Mr. Murray said. "When this exhibitor opened a large, modern, first run theatre in 1940, it is charged that other major distributors' again combined with this dominant producer-distributor in relusing to rent first run films to the new theatre. "It is claimed that the major producer-distributor used its strong bargaining power as the largest theatre owner in the territory to secure the cooperation of the other major distributors in eliminating competition from independent theatres. The complaint also alleges that the major producer-distributor tried to influence the independent exhibitor's creditors to bring pressure to bear on him to sell his theatre to the affiliated chain." Similar coercive measures are described in other complaints, Mr. Murray said. "An objective investigation will be made of these and other charges to correct any evils which might be found to exist," he concluded. Members of the committee are : Mr. Murray, Allen J. Ellender, Louisiana; James M. Mead, New York ; Thomas Stewart, Tennessee ; Claude Pepper, Florida ; James C. Scrugham, Nevada ; Brien McMahon, Connecticut, Democrats ; Arthur Capper, Kansas ; Robert A. Taft, Ohio ; George A. Wilson, Iowa ; Kenneth S. Wherry, Nebraska ; Admiral Thomas Hart, Connecticut, and C. Douglas Buck, Delaware, Republicans. Propaganda Inquiry in 1941 The first to be undertaken since the start of of the war, the investigation would be the second such attention from Congress for the industry. Heralded by a blast in January of 1941 from Senator Burton K. Wheeler, a Democrat of Montana, chairman of the Senate Interstate Commerce Committee, a sub-committee embarked formally upon a war propaganda inquiry September 9 of that year. Preceded by several months of agitation, the hearing delved into charges that motion pictures were engaged upon a campaign to get the nation into the European war. The industry engaged the late Wendell L. Willkie, Republican nominee for President in the 1940 campaign, as special counsel. The investigators were so soundly defeated that Senator Worth D. Clark of Idaho, sub-committee chairman, announced an indefinite postponement on November 29, 1941. After the attack on Pearl Harbor, no attempts were made to revive the investigation. Paramount Pictures, Inc., last week estimated earnings for the year ended December 30, 1944/ $16,488,000 after interest and all charges, inch ing reserves provided for contingencies and e; mated provision for all Federal normal and exc profits taxes. This amount includes $1,745,000, represent! Paramount's direct and indirect net' interest as stockholder in the combined undistributed earnii for the year of partially owned non-consolida subsidiaries. Earnings for the year ended Jai ary 1, 1944, were $16,140,821, including $1,5 = 000 share of undistributed earnings of pactiaf owned non-consolidated subsidiaries. Earnings for the quarter ended December , 1944, are estimated at $4,012,000, which compawith $4,486,000 for the corresponding quarter 1943. These earnings are after eliminating i dividends received during the period from partia owned non-consolidated subsidiaries to the ext that such dividends represent distribution of ea: ings reported as undistributed in previous quarter The $16,488,000 of estimated combined consd dated and share of undistributed earnings for year represent $4.39 per share on the 3,752,, shares of common stock outstanding on Decern! 30, 1944, which compares with $4.30 per share j the year ended January 1, 1944. Estimated eai ings of $4,012,000 for the quarter ended Decern! 30, 1944, represent $1.07 per share on the 752,136 shares of common stock outstanding, wh compares with $1.19 per share for the correspoi ing quarter of 1943. April 19 Drive Meeting Set By United Jewish Appeal The first organizational meeting of execut committeemen of the amusement division of 1 United Jewish Appeal of Greater New York, be held April 19 at 12 :30 at the Hotel Astor, i cording to co-chairmen of the division, David Bei stein, Major Albert Warner and Barney Balab; At the meeting plans will be discussed for launc ing the 1945 campaign in the amusement field. Tl year the United Jewish Appeal is making an r precedented sum of money to meet the needs of four rescue, emergency relief, rehabilitation a welfare agencies — the Joint Distribution Comm tee, the United Palestine Appeal, the National R> ugee Service and the National Jewish Welfj, Board. A statement issued by the three co-chairmen the division said, in part : "Our men and worrij in the amusement field have always been not' for their generosity to people in distress, whet'r at home or abroad. This year the vast flood human needs will demand special liberality — a, special participation by all our colleagues in tl, splendid work." Caffrey Named Member Of SEC by President James J. Caffrey, New York regional admin trator for the Securities and Exchange Comm: sion since 1938, was appointed a member of t' SEC April 6 by President Roosevelt, with hea< quarters in Philadelphia. Mr. Caffrey, who join the SEC in 1936 as an attorney in the genet counsel's office, will succeed Robert H. O'Bric who left recently to become assistant to Barn" Balaban, president of Paramount Pictures. Seek Children's Shows Maurice Schulman, of the Rivoli and Webster theatre circuit in Hartford, Conn., is backing a move in the legislature for the return of Saturday morning children's shows in this city. Branton Appoints "Cabinet" For Tri-States Theatres A cabinet, the chief function of which will coordination of policies and decisions, has be appointed for the Tri-States Theatres circuit, D Moines, by G. Ralph Branton, general managt The "cabinet" includes Mr. Branton, L. McKec neay, Dale McFarland, Russell Fraser, Mai Frye, A. G. Stolte, William Miskell, H. D. Gro^ 16 MOTION PICTURE HERALD, APRIL 14, 19