Photoplay (Jul - Dec 1920)

82 klent William H. Taft, Governor Frank 0. Lowden of Illinois, Edward Osgood Brown, former judge of the Superior Court of Chicago; Julius Roscnwald, president of Sears, Roebuck and Co.; George W. Cable, the author, the Rev. Jenkin Lloyd Jones, celebrated clerygman and lecturer, Edgar A. Bancroft, chief counsel for the International Harvester Company, and such Negro leaders as Emmctt J. Scott and Dr. Robert R. Motr)n of Tuskegee Institute and others. When the investigation of the Birth of a Race Company began, these men promptly announced that they had no interest, whatever, in "Birth of a Race." Their names were being used without their knowledge or authority to strengthen the sale arguments of the men who were selling stock. The company had been selling stock for nearly two years when someone noticed that the "Birth of a Race" officers and the stock sales organizations had overlooked a rather important item of precaution. Illinois had a "Blue Sky Law," and no license had been issued for the sale of "Birth of a Race" stock. Consequently every single sale in Illinois had been made in clear violation of the law. Two of the brokers were arrested, Giles P. Cory of GUes P. Cory and Company, the principal sales agent for the stock, and F. W. Sherwood. Cory pleaded guilty at once and was fined $i,ooo. Sherwood showed fight, but after a while decided to bow to the inevitable, and plead guilty. He was let off with a $ioo fine. None of the officers were touched, except in reputation. Had the law been enforced to the letter, all the stockholders might have recovered some small part of their money, but only a small part, for most of their money had been spent. In the first place the stock salesmen received liberal commission, perhaps not so much as our friend, Jim Honest had to pay his salesmen. However, it was charged during the investigation of the ''Birth of a Race" scandal that some of the salesmen received as high as 50 per cent, commission after the stock had been boo.sted from .^lo, the par value, to $20 a share. Part of the money had gone to pay the salaries of the officers of the company and clerks and stenographers, part had gone to the printers of the heady circulars, part for office rent, and finally, the company had started producing. It had contracted with William H. Sherrill, president of the Frohman Amusement Corporation of New York City to film the story. Sherrill withdrew whin the siandal broke in Chicago. The stock could not he re-sold by brokers in Illinois. It was against the law. But no law was now needed to check the sale of "Birth of a Race" stock. Nobody would buy it. With each fresh exposure of the business methods of the sales organization.';, with each arrest and fine, the stock tumbled "There's Millions in It!" ( Continued jrom page 53 ) in value from its artificial price of $20 to a few cents. There was just a bare chance that the picture might make good and yield some money. The Chicago newspaper investigating the charges against the company and its sales organizations estimated that about 7,000 persons in Illinois had invested in "Birth of a Race" stock, and that between .■nSocooo and Soocooo had been paid in by investors. These figures are perhaps exaggerated. On February 20, J0i8, Secretary Lee issued a statement saying that "the 'Birth of a Race' has issued to date 50,108 shares from which it realized appro.ximately $350,000, less advertising and overhead e.xpense and the cost of resale of stock returned, has netted us S264.3Q3. Of this amount, .S232,662 has actually been spent on the production of the picture." There are hundreds of small investors throughout Chicago and Illinois, many of them widows and men, past tiie age of their greatest usefulness, who arc still clinging to their certificates in the hope that the sixtyodd prints of the picture may some time earn a few dollars and pay dividends. But as this is written, not a cent have investors received. .Assistant Attorney-General Raymond S. Pruitt, who prosecuted the offending brokers, tells the story of one unfortunate man, who had invested most of his life s.ivings, $3,000, some of il in Liberty Bonds, in "Birth of a Race." He sought to recover his money. That was out of the question. He then demanded stock certifi cates for the amount of money he had invested. The brokers refused to give him his certificates till he had completed his payments. He refused to throw good money after bad, worried himself sick over his investment and died. The "Birth of a Race" scandal made it hard to launch another motion picture company in Chicago, and the 'Blue Sky Law " made it still more difficult, as may be judged from the last annual report of Mr. James R. Davis, manager of the Advertisers and Investors' Protective Bureau, affiliated with the Chicago Association of Commerce. Mr. Davis saicl that he had been called upon to pass on S400.000.000 worth of securities, of which he had rejected under the "Blue Sky Law" $201,000,000, a little more than half, as dangerous or fraudulent. Unfortunately, Mr. Davis is forbidden to state just how much of these rejected securities was motion picture issue. They all have big programmes, these companies that are offering to take the public into partnership, but few indeed have outlined such a Napoleonic project as the Crusader Film of Philadelphia. Crusader purposes to produce s screen epic depicting the history of this countn.-. to be entitled ".America, the Hope of Humanity," and fortyeight smaller historical epics, telling in pictures the stories of each of the states of the Union. The company plans to film forty-nine historical dramas. That is all. The territories and dependencies are to be left out in the cold. Under the caption. •Business Possibilities of the National Dramas." page 8 of the Crusader circular, in inspired author or authors of Crusader literature say, the italics being ours: "The thrilling 40 productions, one super-production. America, the Hope of Humanity" and the 48 State Dramas planned by Crusader Films will be so comprehensive as to practically make every man. woman and child in .America a part of them. Everyone of the 1 10.000.000 Americans -iCill want to see them, for they will picture their own life, their families, their own achievements and those of their ancestors. These films uiU crowd the theaters of our country, and give us new ho|ies and ambitions as .Americans. Just a few figures to show what a market exists for the National Drama. •SCHOOL CHILDREN— The educational value of this film is such that the so.ooo.ooo school children throughout the states must sec this film when it comes to their individual towns. // is of more value to them than a whole year's study in school; its p.itriotic effect is beyond calculation: it can be made the Rrcalc^l power for Good Citiicnship thill we have ever known. "CHURCHES— The moral character of (Continued on page log)