The Moving picture world (November 1925-December 1925)

November 14, 1925 M n r f X n picture ^urld 109 Merge in the West VoYamount Replies to Commission's Charge of An Attempted Monopoly Bulky Brief Written in Defense of Manufac' turers* Right to Sell Product Directly to Consumer^ Without Middlemen IN a brief filed with the Federal Trade Commission on November 2, the Famous Players-Lasky Corporation makes a general denial of the charge that it "conspired" to establish a monopoly in the industry. It consists of two bulky volumes. The preface states that it is written "in defense of the American manufacturer to sell his product directly to the consumer, without the interposition of either wholesale or retail middlemen." One sub-heading declares that neither "Famous Players-Lasky Corporation nor any of its constituent corporations now has, or ever has had, any semblance of monopoly in any branch of the motion picture industry." I The Golden State Theatre and Realty | 1 Corp. of San Francisco, operating i 1 thirty-three picture houses in North J g em California, has joined a merger i I which includes the Far West Theatres, | I Inc., of Los Angeles and the North | 1 American Theatres, Inc., a New York | I syndicate. Harry Arthur, formerly gen | I era! manager of West C-ast Theatres, | 1 Inc., is vice-president and general man § 1 ager of the latter concern. i I The Golden State Theatre & Realty | i Corp. is building eleven additional j I houses in Northern California and owns £ I an interest in twenty-one theatres con f I trolled by the T. •& D. Jr. Enterprises. | 1 It has recently added to its chain the i i new Wilson Theatre at Fresno, Cal., | I jointly controlled with Ackerman & | I Harris; the Atkins Theatre, in course j I of construction at Berkeley, Cal., and | I the Theatre Visalia, Visalia, Cal. The j I purchase of the latter involves the ac y I quisition of a site for a new house ad j I joining the Masonic Temple site. Cecil g I B. de Mille, producer and director, has ; been made a director of the Golden ^ I State Theatre & Realty Corp. j illlllillllllllllillllll'lllllllllllllllliiillllllHIIIIIIIIIIIllll IlllUllllllllllllllllllllllllllllilllllllllllllllllllllll I IK Hays Commended for Care of Children in the Studio Recommending tliat other great industries emulate the motion pitture industry in providing the most improved conditions for the education and care of children, the National Association of Compulsory Education Officials, one of the most powerful of all educational bodies, in its recent convention in Duluth, Minn., adopted a resolution giving high praise to motion picture producers. The resolution was adopted after the Los Angeles Board of Education, represented by its director of child welfare, Professor Raymond B. Dunlap, reported to the body just what methods obtained in the motion picture studios for educating and caring for children used in pictures. The association also commended Will H. Hays, president of the Motion Picture Producers and Distributors of America, Inc., for estabhshing "Saturday Morning Movies" for boys and girls. The association recommended that teachers and parents give thorough support to these programs where«ver they are shown. GINSBERG GOES ON TRIP Harry Ginsberg is taking news of Banner and Royal productions for the coming season on his trip westward, proposing to broadcast the good tidings through the West. It further states : "A motion picture producer, like any other manufacturer, may lawfully sell its product directly to the ultimate consumer and may lawfully own the facilities — that is, theatres — necessary for such sale." Commenting on the statement of the commission's counsel for the issuance of an order requiring the respondents to divest themselves of property estimated to be worth $100,000,000, the respondents declare that "they are not at all disturbed by the fact that any such order would revolutionate the whole motion picture industry and require like action against substantially every one of the larger and better known producers and distributors, the undisputed evidence being that integration of exhibition with production and distribution has been a common practice from the very inception of the industry." A suggestion is made that some competitors of Famous Players and affiliated companies may be operating in violation of the AntiTrust law. Denying the charge that it "controls" and "dominates" the motion picture industry the brief states that the Famous Players produces about one-eighth of the total number of feature pictures manufactured; distributes about one-eighth of them and is interested in less than one one-hundreth of the motion picture theatres and about one-fifteenth of the key city first run theatres in the country, it states in this connection : "Never has it produced more than onefifth of the total number of feature pictures manufactured; more than one-fifth of the total number of feature pictures distributed nor operated more than one seventy-fifth of the motion picture theatres or more than onetenth of the first run motion picture theatres in the country." The brief continues ; "While the brief of connuission's counsel contains constant references to the control and domination of Famous Players-Lasky Corporation and its size, neither the examiner nor commission's counsel ever directly gave the commission any idea of the size of competitors or of the size of the industry as a whole. Indeed, they vigorously suppressed all efforts on the part of respondents' counsel to show these facts after the re..pondents had been compelled to produce figures showing their own size and growth." The brief also denies control of motion picture "stars," showing that respondents "at no time had in their employ more than onethird of the stars of any class, character, sex or description." Eleven other producing-distributing corporations are named, and the leading stars employed by these corporations, with the following statement : "Most of these companies, directly or by means of subsidiary corporations, also distribute pictures produced by others. "There are about 100 smaller producers v\ho distribute their product through at least forty -State right distributing organizations, each of which maintains from one to ten exchange offices in different part of the country. "The examiner seeks to create the impression that Famous Players-Lasky Corporation is an organization of tremendous size, which has undergone tremendous growth since 1918. He finds that its outstanding common and preferred stock has doubled since 1918; that its surplus has increased tenfold; that it now pays twice as much out in dividends as it did formerly ; that its profits in the last four years have increased 33 1-3 per cent.; that the value of its physical equipment, including land and buildings, has increased forty-fold between 1917 and 1923, and its tangible assets have trebled between 1918 and 1923. This statement, standing as it does in a vacuum, is worthless. What have its competitors been doing? The more and absolute size of the respondent constitutes no violation of either the Sherman act or Section 5 of tiie Federal Trade Commission act." Touching upon the application of the .\ntiTriist law to the case, the brief, after quoting decisions, avers that under the Sherman act the "wrongful intent" has to be "accompanied by conduct which had some chance of succeeding to carry out this intent." It continues : "Though the Federal Trade Commission act gives remedies which are more elementary than the Sherman act, nevertheless the Federal Trade Commission act is not concerned with mere moral deliqucncy, but with conduct which if not arrested will 'probal)ly' create a monopoly to the detriment of the iniblic. If from the relative situation of the 'combination' such a monopoly is 'improbable" of accomplishment no mere 'intent,' however