Moving Picture World (Feb 1917)

828 THE MOVING PICTURE WORLD February 10, 1917 Industry Menaced by Proposed Taxation &„% BHampton General Film President in Straight-Out Talk Outlines Some Present Real Dangers SPECIAL taxation, censorship and Sunday closing are enough in themselves to wreck the motion picture industry. Any one of these items alone is sufficient to seriously cripple the industry and cause it to change entirely from its present status to a condition entirely different from anything known at the present time. It is difficult to specify which one of the three points contains the largest element of danger, but special taxation in New York State is the most recent attack in the industry. Honest men who advocate taxation in the motion picture industry do not understand the facts, other men are moved by various selfish desires, among others the desire is to get money for preventing legislation. So long as the industry continues to conduct itself honestly it can ignore the grafters, but it must make sure that the facts relative to its present condition are placed fully before the honest but uninformed advocates of this special taxation. One great obstacle concerning the picture men is that their business as a business has been too well "press-agented." The average citizen, high or low, believes that fortunes flow promptly from any contact with the movies. He hears prodigious stories of the vast salaries paid actors and actresses and of the wealth piled up by producers, distributors and exhibitors. Perhaps he even knows personally someone connected with the industry, and from that friend he has secured a cargo of the gaseous dope that permeates every nook and corner of this optimistic industry. The average citizen has no method, nor time, nor inclination to ascertain the facts. He simply assumes that where there is so much smoke there must be some fire. There is a lot of smoke and there is a little fire, but the hard, cold facts relative to the motion picture industry at the present time are that the business is going through a reorganization, because the facts are not satisfactory to the men engaged in it. If you will make inquiry in Wall street you will be surprised to. find how many bankers have lost money or have had unsatisfactory experiences with motion picture ventures. The popular opinion seems to be that Wall street has not invested extensively in picture securities. While this is probably true, the facts are that many Wall street bankers and banking houses have in one way or another put money into various forms of picture propositions. Nearly all resulted unsatisfactorily. A few of the great picture concerns have pleasant, satisfactory Wall street connections, but for every one of these I venture the assertion that you can find fifty deals that have been unsatisfactory. While the flotation of picture shares has in the past been accomplished quietly it has been none the less extensive, and many thousand of investors are now holding picture stocks that are paying them either nothing or that are paying them very unsatisfactory returns. As a result of this, it is difficult to secure capital for picture enterprises. Thoughtful men agree that the picture business is fundamentally as solid as a rock, and that it will continue to grow stronger and better, but this optimistic point of view will never be realized if State Legislatures continue to attack the industry by censorship, Sunday closing; and special taxation. Tine btnsiness cannot stand these strains, and if anyone donbts this let Mm examine any community in America and learn how many motion picture theaters /were in existence a few years ago, and see how many are operating to-day. Then let him look into the ' financial condition of those that are in existence at the present time. I venture the assertion that he will find many exhibitors that are ready to go omit of business. Increase in the cost of operating sneh as wotmld he imposed by special taxation or censorship,, or the rednctiora in rerenne snch as wonld follow Sunday closing, would close mp many theaters. The theaters that wonld snffer wonld be the little ones, the ones that provide good shows for 5 and 10 cents to people who cannot afford to pay more. Comr, these attacks on the motion picture industry ± inmost seiriomsly the small man in the indnsttry and his emstomnieirs., the people off small means. Lett no one deceive hnmsetff abont the. condition of motioni picttnre prodncers. Itt is all very well tto read in the news papers of this star receiving $100,000 a year, and this other star receiving a half a million a year, and to assume that the producers back of these stars are making money in proportion to the risk and investment they are making. Frankly, I do not believe that the facts will bear out this rosy point of view. — I have some knowledge of the conditions that surround about perhaps twenty or twenty-five of the leading producers of the country, and I must say frankly that these men are not making profits justified by their investment of money, time, energy and responsibility. They are doing their work all right, but the star system together with the tremendous increase in all other costs and the lack of increases in the possibilities of rentals is reducing their net returns to a pretty fine point. On the distributing side some of the houses are making fair profits and other are not. So that any way you look into the industry, exhibitor, distributor and producer, you will find that the day of swollen profits is a thing of the past. I firmly believe that a lot of money will be made out of the. motion picture business in the future, if it can live through these attacks of cholera morbus and other diseases of childhood. I believe that because the business is now largely in the hands of careful responsible men, who have eliminated from it the pyrotechnics and hot air of their predecessors. The only swollen profits of the picture business to-day are the profits received by some of the stars. If the State Legislatures want to pass a special tax on the picture industry, this is where it should be levied. The exhibitors, distributor and the manufacturer cannot stand it. These three classes will be compelled to pass on the tax to the people. The result would be that the five-cent theater would have to go out of existence. The effect of that would be that hundreds of thousands of people in New York State alone would be compelled to quit going to the movies. The trouble is that our legislatures legislate without any understanding of the facts. For a long time in this country business men had entirely top much to do with our government, and ran it for their Own selfish purposes. In recent years the tendency fortunately has been in the other direction. A proper system of operation would be to have a perfect union between the business men and the politician. If the business people will try to tell the lawmakers the facts relative to their business, and if the lawmakers will try to get at these facts we will be relieved of legislation as dangerous as this special taxation. ALL AMUSEMENTS THREATENED IN NEW YORK, Provided a bill introduced in the New York Legislature by Assemblyman William S. Coffey, of Westchester, becomes a law, all amusements both indoors and outdoors will be subject to a tax. It is figured that more than $10,000,000 a year will be added to the state's revenues as a result. Every amusement for which a ticket of admission is sold is to be taxed a quarter of a cent for tickets costing 25 cents each; one-half cent for tickets costing 50 cents and one cent for tickets selling at $1, and so on in ever increasing multiples. Stamps of various denominations are to be affixed to the tickets. In New York, where it is said that 80 per cent of the amusement attending public spends its money, it is estimated that at least $9,000,000 will come to the state from the proposed taxation. Church bazaars, baseball, football, polo, theatre and in fact all amusements come in line for taxation. The stamp tax is to be made in denominations small enough to apply to even motion 'pictOre houses. NEW MANAGER FOR KLEINE BRANCH OFFICE. J. P. Gruwell has been appointed manager of the KleineEdison-Selig-Essanay branch office at Cincinnati, Ohio. Mr. Grnwell has been identified with the Kansas City branch of the "Keys" service for some time, and is well equipped in experience and ability to .give splendid service to the exhibitors off the Cincinnati territory. Mr. Gruwell succeeds Harry Bngie, former Kleine branch manager at Cincinnati, who has been transferred to the Philadelphia office, which will henceforth be nnder his direction. Mr. Bugie was stationed at Philadelphia before assuming the management of the Ohio ofiBce, and is well acquainted with exhibitors and arfflinditions fib the Quaker City territory.