Motion Picture Herald (Jan-Feb 1945)

BILLS AND THREAT OF BILLS SOUND INDUSTRY ALERT Run Scale from Taxes to Probes; Could Reach Far Into Trade by BILL FORMBY Exhibitors looked up from the war news this week to discover that the last fortnight had brought them a bundle of sound and fury — perhaps signifying much — from legislative halls and committees, national and local. Occasional fragments of glad tidings intruded timi idly, and for the most part the attacks were I aimed entirely without geographical pattern I toward their prime target — the motion picture I industry. Insisting upon attention, and varying degrees I of concern, were such proposals as a 10 per j cent tax on grosses, immediate rebuilding of j projection booths with no materials available, j a plan by a U. S. Senate Committee to investi' gate monopoly, prohibition of designated playdates, a slap at "stand-by" musicians and other I union "make-work" practices, scrutiny of capiI tal gains corporate structures — stars becoming I producers, and a "grade-labeling" measure requiring a five-second flash on the screen showing date of production. Asking Whether Independents Frozen Out by Monopolies The monopoly investigation, presumably to ! encompass production and exhibition, would j be carried out by the Senate Small Business I Committee, according to word from Washington. Preparation was believed to have been started under the direction of counsel Dewey Anderson, which rooted it in a background of experience. Mr. Anderson, it will be recalled, formerly was with the Temporary National Economic Committee which investigated the industry before the war. The new purpose was to determine whether there were any independents being driven out of the business by monopolies. Senator James E. Murray, of Montana, is chairman. From Los Angeles came word that the Treasury Department intended to subject to a "rigorous scrutiny" many capital gains corporate structures it suspected were established for the purpose of reducing earning positions of parent companies to spread high-bracket taxes. There was no indication that the inj dustry was being especially singled out for I investigation. It was clear, however, that the trade was being studied along with others. During recent months, a number of important stars have formed their own production units, and producers who previously had been under contracts to studios have gone into production. Treasury Concerned Over Many New Companies I Harry C. Westover, who is the Collector ] of Internal Revenue for the Southern CaliI fornia district, said that the Treasury was becoming increasingly concerned over the numI ber of corporations formed and thereafter dis! banded in all businesses. The bill aimed at "make-work" practices of certain labor unions, and the reduction of "stand-by" musicians was introduced in Washington by Representative Monroney of Oklahoma. If passed, it would halt the hiring by theatres of an extra local orchestra when out MOTION PICTURE HERALD, FEBRUARY 24, t945 NATIONAL — Senate commiftee plans investigation of monopoly. Treasury warns of "rigorous scrutiny" of capital gains corporate structures. House considers curbs on union "standfay" ond "mafce-work" practices. CALIFORNIA — "Grade labeling" proposed by enforced screen display of production date for each film. New Indoor Recreation Commission. Enforced display of United States and California state flags. COLORADO — Two per cent service tax, which applied to admissions over five cents, repealed. CONNECTICUT — Exhibitors plan opposition to several measures. OEOR&IA — House bill proposes Sunday shows by local option. INDIANA — Senate committee studies prohibition of designated playdates and specified length of run. IOWA — iteguiation of theatre construction proposed with immediate changes in the face of lack of materials. MASSACHUSETTS— House bill asks ten csr -.iu^i tax on gross, and another would tax exhibitors $1 per reel for film exhibited. NEBRASKA — Two per cent sales tax asked. NEW YORK — Hearings on Ives-Quinn anti-discrimination employment bill continue. OHIO — Limitations demanded on working hours for women, and on employment of minors. PENNSYLVANIA— Church and reform groups to seek ban on Sunday shows. 4nti-discrimination empiomyent bill introduced. TENNESSEE — Public to vote in Lebanon on retaining Sunday shows. of-town bands were used for stage shows. This, observers interpreted as another arm in the Congressional "pincer's movement" against James C. Petrillo and his American Federation of Musicians. It has been union practice to force the employment of musicians to stand idle when special, or regular, stage attractions feature traveling musical groups. It could possibly affect the employment of two or more projectionists in a booth where such employment was not directly required for safety reasons. Sounds Warning Against State and Municipal Taxes A warning against state and municipal taxes was sounded by Ed L. Kuykendall, president of the Motion Picture Theatre Owners of America. He deplored the failure of the industry to get together on the recent plan for joint approach to local legislation, holding the distributors to blame. This, and other developments, were punctuated by an estimate that 85 per cent of the return from Federal admission taxes in the 1943-44 fiscal year came from theatres. Joseph D. Nunan, Commissioner of Internal Revenue, said that $177,993,776 of the $205,289,025 collected during the Government's fiscal year ended June 30, last, came from that source. Out in Nebraska, a state that did not have a sales tax or income tax, and did not have any bonded indebtedness, a two per cent sales impost bill was introduced in the unicameral Legislature at Lincoln. Sales under 15 cents were exempted. In Iowa, theatre showmen, urged by Leo F. Wolcott, president of Allied Theatre Owners of Iowa-Nebraska, opposed a pending bill in the House regulating theatre construction. Introduced at the instance of organized labor, the measure was supported by the projectionist union of the International Alliance of Theatrical Stage Employees. It outlined plans for new theatres after the war, but provided that existing facilities be improved immediately to the same degree. The hitch was that no materials were available to make the changes. Mr. Wolcott charged that its enactment would force the closing of half of the theatres in the state, it covered booth size, ventilation, electrical equipment and wiring, and prohibited anyone under 18 from operating projection machines. Exhibitors complained that it exempted traveling motion picture operators, churches, schools, clubs and halls. Iowa Theatres Already Taxed Almost Fourth of Gross In the same state, exhibitors heard reports of a new measure to license distributors at the rate of $1,000 yearly and to tax them $1 per reel on prints. It was pointed out that theatres in the area already were taxed 22 per cent of their gross. Traditionally opposed to the exhibition of pictures on Sunday, the State of Georgia would allow local option by cities or counties if a bill passed in the Senate by a vote of 35 to eight were enacted. It would permit motion pictures theatres to operate between 2 and 11:30 P.M. Ten per cent of the registered voters in any locality could by petition force an election. The measure was introduced by Senator Homer L. Causey, of Alma. The Indiana Senate Judiciary Committee was due to consider a bill passed by the House that would outlaw designated playdates. Introduced by Rep. A. B. Thompson, an exhibitor of North Vernon, Ind., it passed the House after an amendment had removed a proscription against percentage contracts. Remaining, however, was a provision prohibiting distributor specification of the length of engagements. It was anticipated that an attempt would be made to restore the ban on percentage deals. It carried a fine of $5,000 for violation. Exhibitors in Massachusetts recently were concerned over the special message by Gov. Maurice J. Tobin, indicating that more than $32,000,000 in additional revenue must be raised by taxation this year. He cited the loss of some $6,000,000 expected to result from the elimination of racing. Apparently the showmen had good cause for anxiety. A proposal was introduced this week for a 10 per cent tax on admission to theatres and other amusement spots. Massachusetts Legislature Asked to Tax Exhibitors Moreover, the Massachusetts Legislature has been petitioned for taxation of exhibitors at the rate of $1 per reel. Proceeds, estimated to average about $8,130,375 yearly, would be used to care for ill, wounded and disabled veterans, old age assistance and the care of widows and orphans of veterans. Louis T. Capelle, of Dorchester, who introduced the bill, said that if it (Continued on following page, column 1) 13