The Moving picture world (November 1921)

526 MOVING PICTURE WORLD Stanley Enterprises File Answer tc Charges of Federal Trade Commission A FRANK discussion of the activities of the Stanley Booking Corporation and the Stanley Company of America marks the joint answer filed with the Federal Trade Commission by those concerns and by Jules E. Mastbaum, their president, in the formal complaint against the Famous Players-Lasky Corporation and others. Declaring that at the time of its organization Famous Players had in its employ many stars whose pictures were in great demand by exhibitors throughout the United States, the answer says: "We are in ignorance of its internal management and know only by rumor of its composition and legal history. We do not know what percentage of the revenue from films is derived from particular showings, nor do we know which are the key cities of the United States, although we do know that it is important for pictures to have proper showings in important cities." Money Needed for Expansion Approval of the Federal Trade Commission was given to the agreement between the answering respondents and Famous Players, it is asserted, and the Stanley enterprises at all times have endeavored to keep within the law. The answer denies "that Stanley Company of America combined or conspired together or with Famous Players-Lasky Corporation, Mr. Lasky or Mr. Zukor, or any one else, to secure control of the motion picture industry in Eastern Pennsylvania, Western New Jersey and Delaware. "We cannot tell what the intention of Famous Players-Lasky Corporation was when it made a contract with us by which it purchased from $2,000,000 of notes, part of which it paid for in stock of Famous Players-Lasky Corporation. We do know what was in our own mind. The expansion of our business required large sums of money, and the investing public was not sufficiently familiar with the values of picture enterprises to make it possible for us to get money from that source. "We had been successful in our business and the producers of moving pictures were familiar with that success. They therefore had confidence in our enterprise, and were willing to lend us money. Zukor Was Invited "We preferred to make an agreement with Famous Players-Lasky Corporation because it produced many of the best and most popular pictures. We did not, however, bind ourselves to buy any pictures from Famous Players-Lasky Corporation, nor did we attempt to bind it to sell any pictures to us. It is true that Mr. Zukor became one of eleven directors of our company, not because he asked to become such, but because we requested that he do, feeling that the advice of a man as familiar with the business as he was would be of great value to us. Unfortunately, he has rarely had the time to attend directors' meetings. "We have denied that there was any conspiracy or combination between Famous Players-Lasky Corporation and ourselves. There was an agreement which was exhibited to the representative of the Federal Trade Commission and approved of by it as an entirely proper and business-like agreement. It did not result in any exclusive showing of Paramount pictures or of Paramount-Artcraft pictures. On the contrary we show pictures of many producers. The pictures handled by Famous Players-Lasky Corporation are given no preference over others in our houses, except such preference as they are entitled to by reason of their merit and the terms on which we are able to secure them. We have not felt compelled to buy pictures that we did not consider meritorious, nor to buy pictures which we could not secure on terms that seemed to us proper terms. Deny Coercion "The fact is that there was an overproduction of pictures for a time and there were not enough houses in the district to consume all the pictures offered. This is not because our theatres could not use them. There are in the district many other houses, including theatres in which first runs are exhibited, and we never have attempted to interfere with or influence the booking of pictures outside of our own houses." The respondents also deny that they acquired any theatres by coercion or intimidation, or have attempted to coerce or intimidated any one into giving exclusive rights to book pictures for their theatres. "The contracts which the Stanley Booking Corporation has for booking pictures," it is declared, "had been entered into entirely as a matter of free will and of the desire of the contracting party to be associated with us in order to secure the benefit of the experience which we have gained in the industry, and the advantages that accrue from the well-established practice of co-operative buying." Situation in Philadelphia It is denied that Stanley owns or operates every first run house in Philadelphia, a number of such houses not controlled by the respondents being cited by name. The respondents also deny the jurisdiction of the commission in this case, so far as they are concerned, asserting that they are not engaged in interstate commerce and so are without the purview of the trade commission's authority. This is the last answer to be filed on the complaint against Famous Players. A date on which an oral hearing will be ^iven will be set by the commission in the near future. December 3. 1921 New Complaint Charges Saenger Company with Stifling Competition Unfair methods of competition, designed to stifle, suppress and unduly hinder competitors, are charged against the Saenger Amusement Company in an amended complaint which has just been issued by the Federal Trade Commission. Among the charge made by the commission are that "the respondent, within the last year before the commencement of this proceeding, with the effect of stifling, suppressing and unduly hindering competition in the purchasing, leasing and licensing of moving picture films in interstate commerce, has made threats to certain moving picture film exchanges that unless they accepted terms made by respondent for the lease, sale or license of such moving picture films, the respondent would cause exhibitors of moving picture films to refuse to lease, handle or procure the license of the moving picture films of such film exchanges ; and that, pursuant to such threats, the respondent did in fact cause exhibitors to refuse to lease, handle or procure the license of the films of such exchanges." Alleges Broken Contracts The complaint also charges the company with causing contracts for exhibition of different films made between certain exchanges and certain exhibitors to be canceled or broken by exhibitors. It is also charged that such contracts were also caused to be broken by exchanges, among them being contracts for first exhibition of certain films, canceled after the exhibition of the films were announced and advertised by exhibitors, "whereupon the respondent, or parties connected with it, advertised and displayed the same in advance of the date so advertised and announced by exhibitors." The commission's complaint further charges that by threats of withdrawing patronage, the respondent compelled exchanges to cease supplying films to competing exhibitors. It is averred the Saenger company has compelled exhibitors to book through its agency by threats of cutting off the supply of films, and that, further, it has systematically induced employes of competitors to leave their employment by offering employment with the respondent. An answer to the charges is to be filed with the commission by December 10. Dorothea Herzog Becomes Editor of Movie Weekly Dorothea B. Herzog. formerly a publicity representative and more recently a reviewer for one of the trade papers, has been promoted to the editorship of Movie Weekly. Miss Herzog joined this publication last February as an associate editor and her promotion comes after months of live-wire editorial and interviewing work. Among Miss Herzog's best known articles, in addition to her Movie Weekly contributions, are a series of four motion picture articles run in Munsey's Magazine dealing with different phases of the industry.