Motion Picture News (Nov-Dec 1925)

November 28, 19 2 5 2539 Famous Files Supplementary Brief Argument Intimates Unfairness of Examiner in Investigation Before Federal Trade Commission AN interpretation of the 17,000 pages of testimony taken during the course of the hearings in the Federal Trade Commission's investigation of Famous Players-Lasky, differing greatly from that made by the counsel for the commission in his brief asking that the respondents be ordered to divest themselves of their exhibition activities and to discontinue block booking, is given by Famous Players in the argument filed with the commission this week as a supplement to their brief answering that of the Government's counsel. The original brief of the company required over 550 printed pages: the argument covers some 325 additional, in which the points brought out in the commission's counsel's brief are discussed and interpreted from the view of the respondents. A spirit of unfairness hus been maintained throughout the proceeding, it is intimated in t he Famous Players argument. As proof of this, it cites the question by the commission's counsel, asked of a number of witnesses, ''What effect does it have upon the competition among the producers of motion pictures where a large producer owns quite a number of first class first run theatres in different key cities ?" , which was objected to by the respondent's counsel, but allowed by the examiner, while the similar question asked of a number of witnesses by the respondent's counsel, "What in your judgment has been the actual effect upon the market for good pictures in this territory of the ownership of theatres by the producer whose name is Famous Players-Lasky Corporation?" was ruled out by the examiner upon objection by the counsel's commission. The first 7,000 pages of testimony, it is declared, is a mass of so-called opinion evidence, hearsay and "back-stairs gossip," and, it is asserted "attempt after attempt of the respondents' counsel to answer hearsay and opinion evidence by testimony as to actual facts by witnesses who knew the facts was met with a barrage of objections, most of which were sustained by the examiner." There is only one question before the commission, the argument indicates, stated in the opening sentence. "This brief is written in defence of the right of the American manufacturer to sell his product directly to the consumer, without the interposition of either wholesale or retail middlemen." Considerable space is given over to a discussion of the make-up of the industry to support the contention that "neither Famous Players-Lasky Corporation, nor any of its constituent corporations, now has, or ever has had, any semblance of monoply in any branch of the motion picture industry." Comparisons are made between the inci'ease in production of the respondents and that of the Bethlehem Steel Company and other important industrial concerns. In no year has Famous Players ever produced or distributed as much as 20 per cent of the feature pictures, it is declared, nor has its rentals from its pictures ever exceeded 31 per cent of the total of the country. "While we insist that Famous PlayersLasky Corporation has the absolute legal right to devote all of the time of all of its theatres solely to the showing of its own pictures," the argument states, "the fact is that a very large part of the time of the theatres in which it has an interest has been taken up in the exhibition of the product of its competitors. It is a fact, therefore, that the theatres in which Famous Players-Lasky Corporation are interested themselves afford an excellent market for the pictures of competing producers and distributors." "A motion picture producer, like any other manufacturer, may lawfully sell its product directly to the ultimate consumer, and may lawfully own the facilities for such sale," it is contended. The respondents deny that unfair or coercive measures have ever been used, either in the acquisition of theatres or in their sales of Paramount pictures, discussing in detail the various cases cited before the commission to show that Famous Players had its agents threaten exhibitors with producer-owned theatres in order to make them accept Paramount pictures 100 per cent at high prices. Taking up the question of block booking, it is declared that this practice has been rooted in the industry from its inception, that all large companies, with the exception of United Artists, who turn out exceptionally fine pictures, follow the practice, and that the great majority of exhibitors take less than the entire block of pictures offered. When but one or two pictures were taken, it is pointed out, naturally they were offered at a higher price, the quotation for the block being in the nature of a "wholesale" price for a quantity purchase. The commission has no jurisdiction to order Famous Players to sell its theatres, it is asserted in conclusion. Neither the acquisition nor the ownership of theatres by motion picture producers is a method of competition. Many of the alleged unfair acts of the respondents relate only to intrastate commerce, which is not within the scope of the commission's jurisdiction. A brief in reply will be filed by the commission's counsel about November 20. M. P. T. O. A. Committee Meets Here $15,000 Returned to Independent Association — Other Important Steps Taken ONCRETE plans developed at sessions of the Administrative Committee lasting over eight hours this week will be put into immediate execution for the rehabilitating of the Motion Picture Theatre Owners of America into a powerful organization. As one of the first planks in the new platform of strength the exhibitor leaders on November 18th, wrote out and delivered a check of $15,000 to the Independent Motion Picture Association of America. At the same time they cancelled an additional and written obligation of the independent association to the national organization totaling $25,000. That the I. M. P. A. A. may continue the maintenance of their association and that Independence may be furthered is the basis upon which the Administrative Committee, at the request of the Play Date Bureau, took this action. The Committee, as a token of the appreciation of the National organization, Ito Carl Laemmle in his pledge of $50,000 for the cause of Independence made in the name of the Universal Film Corporation at Milwaukee, was unanimous in its endorsement of a resolution providing for the tendering of a testimonial dinner to Mr. Laemmle in January. In the Music Tax situation the committee authorized the engagement of Fulton J. Brylawski, Copyright attorney of Washington, as the first step in the forthcoming fight against the American Society of Composers, Authors Association. Kindred theatrical organizations and associations will be invited to join the National Association of Theatre Owners in this movement. The fullest cooperation will be afforded Mr. Seider in his capacity as Business Manager. Upon this official the executive committee rests much of the hope for the establishing of the National Organization on a rock-bound basis. The building up of a campaign against all copyright legislation adverse to the industry will be one of Mr. Seider's many earlier tasks. The Administrative Committee heartily sanctioned the issuance by the Business Manager of an organization bulletin which will chronicle all matters of a technical and intimate interest to members of the National Organization. Details concerning the nature of this bulletin will shortly be announced in a statement to the entire industry by Mr. Seider. In regard to the report concerning the possible merging of the United Artists interests with those of Metro-Goldwyn the Administrative Committee went on record as opposed. A telegram in this respect was dispatched to Mr. and Mrs. Douglas Fairbanks adjuring them to consider Independence before making any move of this nature. Every member of the Administrative Committee, with the exception of Nathan Yamins of Fall River, was present at the meetings. They were all of the opinion that never before have they had stich a constructive session as the one which they have just completed.