Report regarding investigation directed to be made by the President in his Executive Order of November 27, 1933, approving the Code of Fair Competition for the motion picture industry (July 1934)

Most of the major producers have made decided efforts to correct the abuses resulting from excessive production costs. Acting individually and without the aid of any centralized machinery, however, their efforts have been ineffective. THE STATISTICAL SURVEY AND DEMONSTRABLE FACTS ASCERTAINED THEREFROM With the cooperation of Donald K. Wallace, of the Division of Economic Research and Planning, National Recovery Administration, a statistical survey has been made with respect to the problems of payment of excessive compensation. The work of Mr. Wallace is particularly noteworthy, since the tabulations contained in the appendix annexed hereto were formulated in such complete and minute detail that in each case they speak for themselves. His work has been deserving of especial commendation. Scope of Investigation Dual sets of the questionnaire which was used in connection with this investigation were mailed to approximately 2,000 individual establishments in the motion picture industry. Companies engaged in the production, distribution, and exhibition of motion pictures, or any combination of the three activities, were included. Owing to the fact that only companies employing individuals whose aggregate compensation amounted to $150 or more per week each were required to report, a very substantial majority of the total companies were automatically released from the necessity of reporting. Information was obtained from all of the major companies, as well as from so-called "small " and "mediumsized" organizations, which are quite generally classed as independents. Representation Information assembled and analyzed in this report covers the activities of 77 separate organizations, and it is felt that a representative cross-section of the three branches of the industry is revealed in the findings of the investigation, especially since only 9 companies represent the bulk of employment above the salary limitation of $150 or more a week which was established as a dividing line between the companies which were and were not required to supply the necessary information. Information Included In gathering the facts for this investigation, information was obtained from each company regarding gross receipts, total capital investment, surplus and surplus reserves, total assets, and net operating profit or loss. In addition to the above, data were gathered from each organization regarding the total dumber of, and total compensation to, executives; supervisors; clerical, office, and service employees; actors and actresses (excluding extras); extra players; motion picture directors; musical directors and musicians; writers, authors, and dramatists (regularly employed and not regularly employed); composers, arrangers, and librarians; artists and sculptors; scenic artists and designers; costume designers ; sound engineers ; sound technicians ; cameramen; studio mechanics; laboratory workers; "all other" employees; grand total; and regular pay roll employees. Information was obtained also relative to total compensation, weekly wage-rates, cash salary received, and "all other" compensation received during 1933. Where compensation was reported under "all others", a further breakdown was obtained to determine whether it represented cash bonuses, commissions, and other compensation in addition to cash salary ; bonuses, commissions, and other compensation in capital stock, bonds, or other securities; subscription rights for bonds, stock, or other securities included in special options; or any other compensation, remuneration, or gift, etc., not included elsewhere. Arrangement of Material The tabulated report annexed hereto is divided into separate sections as follows: Section A. General statistics and average compensation.— This section includes basic recapitulations of operating conditions for the years 1931 to 1933, inclusive, as well as information regarding employment and average compensation during that period. Section B. Producing-distribvting companies. — Included in this section are data relative to the operations of so-called dual companies whose production and distribution activities are inseparable and operate as one. In certain instances separate information was available for each of the separate activities, which are combined as one, and, in such cases, it has been incorporated in the findings and designated by an asterisk (*) for production only, and by a dagger (f) for distribution only. Section C. Producing companies. — These concerns only produce pictures, their distribution being handled by outside organizations. Section D. Distributing companies.— These concerns engage in distribution only and act as intermediaries between so-called independent producers and exhibitors. Section E. Motion picture exhibition. Section F. Compensation of individuals employed in two or more departments of the same company.— Inasmuch as this report is set up on a departmental basis, individuals receiving compensation from two or more departments are reported twice and, income cases, three times in the general departmental breakdowns. To eliminate this duplication, which was evident only in a few instances, their salaries have been combined in this section to arrive at their total compensation.