The Moving picture world (September 1923-October 1923)

September 1, 1923 MOV I A (7 PICTURE WO R I. 0 33 Paramount Defense Successful at Boston Trade Hearing Exhibitors' Testimony Fails to Show Monopoly, Tis Said (Special to Moving Picture World I Boston, Aug. 21 ALLEGATIONS of the Federal Trade Commission that the Famous Players-Lasky Corporation of New York has created a producer-distributor-exhibitor monopoly in the motion picture industry in this country, in opposition to others engaged in the same line of endeavor, were probed as to their local aspects at a hearing before Examiner E. C. Alford that continued throughout yesterday and today in the Federal Building here. Coincident with the results of the hearings that were held at Dallas, Texas, the greater part of the testimony given at this short hearing here proved in favor of the Famous Players-Lasky Corporation, so much so in fact that Robert T. Swaine, chief counsel for the latter, decided to waive cross-examination in all but a few Adjourned a Month Virtually all of the testimony adduced was from the exhibitor standpoint, although a number of film exchange managers also took the stand. Testimony of several theatre owners of Northern New England was to the effect that Alfred S. Black of the Black New England Theatres, Inc., one of the respondents to the Federal complaint, did follow the lines as alleged in the complaint in causing them to sell out to Black through threats of competition. It was admitted, however, that Black at that time was not connected with the Famous Players-Lasky Corporation. An adjournment of the hearing came late today, without any intimation as to whether there will be further witnesses called. No hearing will be held until late in September, at any rate. Examiner Alford refused to discuss his opinion as to the results of the local probe and stated that he would make his report regarding it to Washington. Bill of Complaint The Federal charges lie against the Famous Players-Lasky Corporation, Realart Pictures Corporation, the Stanley Company of America, Black New England Theatres, Inc., Southern Enterprises, Inc., Saengcr Amusement Company, Adolph Zukor, Jesse L. Lasky, Jules Mastbaum, Alfred S. Black, Stephen Lynch and Ernest V. Richards. The latter named individuals are connected with the concerns indicated. The Bill of Complaint alleged that all the defendants have conspired to create a monopoly with such success that in one week in 1920 six thousand American motion picture houses, or one-third of all exhibitors, showed nothing but Paramount pictures, and that about sixty-seven cents of every dollar expended for admissions to American picture theatres went to theatres showing Paramount pictures. Continuing, the bill recites that in 1916 the leading producing concerns were Jesse L. Las ey Feature Play Company, Inc., Famous Players Film Company, and Bosworth. Inc. At that time Paramount Pictures Corporation was the largest distributor of films. It is charged that in 1916 the Famous Players-Lasky Corporation acquired the whole of the stock and share capital of the Lasky Feature Play Company, Inc., Famous Players and Bosworth, and caused all to be dissolved and to cease to do business. Further Allegations Next, the respondent corporation is charged with incorporating the Artcraft Pictures Corporation, which competed with Paramount in distributing. It is then charged that it caused the stock and share capital of Paramount and Artcraft, together with their physical assets, to be transferred to itself, and to be dissolved and cease business. It then distributed films under the old names. The bill alleges that a policy of affiliation with independent producers then was pursued ; that in 1919 Realart Pictures Corpora"on "as ''nc^-norated, and fcr a long time its ownership by Famous Players-LasVy Corporation was concealed, for the purpose, it is charged, of deceiving exhibitors. Realart later was merged with Famous Players. In 1918-1919, it is charged, the corporation entered into a program of acquiring and controlling by purchase or otherwise firstrun houses all over the country, compelling and coercing exhibitors to exhibit all films produced by it, by insisting upon "block" purchases covering entire seasons in the theatres so affected. Called Largest Theatre Owner As a result, the bill asserts, the Famous Players-Lasky Corporation is the largest theatre owner in the world. In acquiring or controlling moving picture theatres, the bill charges, intimidation of various sorts was used and a variety of hindrances were thrown in the way of individuals who opposed the corporation. Many instances of such tactics are enumerated in the succeeding sub-paragraphs, and the bill goes on to recite that "the same tactics continue." Considerable interest has been manifested by the representatives in New England of the various branches of the moving picture industry, in the case, as this section has been a fertile field for complaint as to the alleged charges in the Federal bill of complaint. Reports of the hearing sessions in N'ew ork, Philadelphia, Atlanta, New Orleans and Dallas have been reviewed with keen interest, and it was believed that if additional hearings were to be held in this city a mass of testimony would be adduced that would be incontrovertible. Whether such will be brought out at later hearings, if any are held, is a matter of conjecture In any event, it is quite evident that the Government did not add much to its case in the present instance, although it is possible that its full quota of witnesses were not called at this time. As a matter of fact, it seems probable that there arc many persons who niignt be interested to appear who did not even know that the hearing was scheduled. Even the wise newspaper boys who cover the Federal Building for the Boston daily papers had no intimation of this fact, and the fust day's proceedings were concluded in a little room in the Federal Building before they were aware that such a hearing was under way. Gray Testifies William P. Gray of the Grav Theatres of New England, whose main offices are in Boston, was the initial witness called. He testified that he operates a chain of thirty-one theatres of his own, spread over twenty New England towns, and that, besides these, he also manages a Famous Players-Lasky circuit in New England comprising twenty-five theatres. He said he assumed the management of the Famous Players Maine and New Hampshire theatres in August, 1922, and took over the rest of the theatre chain in February of this year. Gray declared that he booked pictures by theatres, and not for the circuit, not onlv in his own houses but in those of the Famous Players-Lasky chain as well, and he asserted that not only did he book the Famous Players product, but used many First National, Warner Brothers, Metro. United Artists, and pictures produced at other prominent studios. Sawyer No Aid "Commonwealth's Assured Successes" is the title of a distinctive catalogue which has just reached our desk. Compiled by Fred Baer, the two-color booklet tells of the new season's pictures to be distributed in their zone by Commonwealth Film Corporation. It's a fine line-up that Sam Zierler has this year, and he justly deserves the success that the pictures listed are sure to meet. — The Editor. J. W. Sawyer, New England manager for Vitagraph, discussed the general situation here, but brought no facts of vital importance to the issue. Attorney Fuller's attempt to get him to go into a description of some of the Famous Players' holdings that have been sold, met with no particular success. M. A. Hill, New England manager for Metro, testified that his relations with Famous Players-Lasky, after the latter hail bought full control of the Black circuit of theatres, had been very friendly and satisfactory. He said that for a time the prices paid to him for Metro pictures were slightly lower than normal, but that during the fiscal year of 1922-192.1, since Famous Players has obtained full control of the Black interest, the prices received had been most satisfactory and his relations with Famous Players of the friendliest. He declared that in Boston it is the custom to give two weeks protection to all first run horses, and that this held good with all exchanges in the local territory. Manager Hill also brought out the fact that New England now has seven circuits of motion picture theatres and that, from (Continued on next pact)