Variety (Jun 1935)

6 VARIETY PICTURES Wednesdajt June 5, 1935 Seasonal Shakeout and Federal Debacle Combine on Toboggan For Stocks After Sleigh Ride stock prices reversed their trend yesterday (Tuesday), with many nmusements Joining In the general trend towards higher levels. This strength found Technicolor making u new 1935 high at 27, Issue closing a point up on the day. Keith bonds jUso went to a new peak at SOVI, a gain of IVl- Stocks to show major gains included Columbia Pictures certiflcatos, up 2%; Eastman Kodak common, up 3% ; Radio A (ex-divi- dend) up 1%; Radio B up 2%; o "Warner Bros. preCerrcd, up ■Westinghouse common, up 1%; and preferred, up 3 points. Warner Bros, liens climbed 2 points to 63% while all Paramount bonds were l-e'.ter. Expected reaction in Amusement G- oup followed closely on heclr, .of II. S. Supreme Court decision—last week. Even in the face of nearly 1 % points decline in the group, five common and preferred issues of the list went to new 1935 highs and two liens also edged to new peaks. Amusement Group got up to 32, as measured by the averages, and then fell sharply to 28%. Close was at slightly above 30. The only redeeming feature of this group's action was the fact that volume fell off also. Technicolor, which closed at, 2.")%; Eastman Kodak, which went Into- fresh territory at 149>4. and the preferred stock, which hit 156; Keith preferred, at 55%; and Westinghouse preferred, at 105, were the Issues to make new tops. Paramount-Publix 5%s, at 91%, and certificates of the same, at 91%, were the bonds to hit new highs. Reaction in the amusements came as no great surprise to many traders. As pointed out here last ■week, shrewd chart experts thought the Amusement Group was due fcr at least a technical reaction, what with the usual seasonal de- cline In theati-e receipts each sum- mer plus the fact that the group had gone up consistently without halt for 10 weeks. It also was in- dicated that several amusement Blocks gave plain signs of fatigue from recent spurts to successively new highs. Hence, the smart traders were not canght unawares Politics Only One Angle Political news from "Washington was expected, as revealed here, to Influence the general market trend. This is exactly what happened. The Supreme Court decision was ■taken as a signal by traders to throw industrial and numerous other groups Into reverse. Consensus of market observa- tions Monday (3) was that the whole market had been due for a brisk shake-out, whether t he court's decision or some other news proved the signal for the reaction •which actually occurred. In many quarters, the action In tossing the NRA out the window was regarded as being definitely bullish on the long-term trend. Just when the stock market will readjust Itself and start upwards again on a big Bcale was difflcult to estimate, but Bome felt that It might start In July. Some of the more shrewd trad- ers were Inclined to believe that the next truly bullish movement would take In two other Important groups, the rails and utilities, •which have been extreme laggards during the last four or five weeks of the upswing which shot the In- du.strials Into new high ground. An Indication that such course might be taken by the market was Been In the action of these two tToups even last week. Ralls went to 32.50, as measured by the Dow- Jones averages, while the utility group, based on the same aver- ages, climbed to 21.04. Improve- ment of utility preferred stocks was even more marked than with the common Issues. While this was transpiring, the Dow-Jonea Indus- trial averages dipped to below 110 and closed at 111.46 for a loss of B.29 points. Col and Radio lide Columbia Pictures fell to B3'^ during the week, at which point the (Continued on page 49) ALTO BERSERK ON NRA BREACH Baltimore, June 4. Fortnight ago the now-demised Code Authority of the NRA brought up Robert Marhenke of the Majes- tic, small south-side nabe, and or- dered him to stop distributing passes upon which were levied a 5c tax. Complaint which prompted the review of the sltuash by local zone authorities was made by the Roy theatre, nearby opposlsh site. Day after the Supreme Court de- cision spelled finis for NRA, the Roy flooded the section of. town with 'passes' Identical to those used by the Majestic. Other nabes have commenced practices from which they ab- stained heretofore because of feared NRA Intervention. Most of same have lopped salaries again to sub- NRA levels. The downtown first- runners and the larger and more important nabe spots are all still abiding by the Code rulings as to hours and salaries. Exhlbs all be- lieve that It will only be matter of short_ while before the President and advisers have formulated a new NRA which will closely ap- proximate the old one, yet remain within bounds of constitutionalitS'. WB-G.S. Hearing on % Men' Ads June 7 Chicago, June 4. Injunction suits of Warner Bros, against Publlx Great States to stop advertising In Peoria, III., and South Bend on 'Let 'Em Have It' (UA), alleged to be confusing that picture with 'G Men' (WB), may hot be settled for a couple weeks. Intent Is to ward off conflicting ads in other spots. Publix Great States has discon- tinued use of the so-called objec- tionable advertising and has Issued instructions for the circuit, but re- tains 'Government men' in ad copy. Court hearing scheduled for June 7. RGA Stays NRA Radio Corp. of America came out flat-footedly yesterday (Tuesday) for NRA hours and wages. David Sarnoff, president of RCA, announced that RCA and all of Us wholly owned companies would continue t)ie same hours and wages as were In effect under the NRA codes. RKO'S '34 $21,000,000; NET LOSS, $310,574 Report of the Irving Trust com- pariy, as trustee, shows a net loss of $310,574 for Radio-Keith-Orpheum, for the year ended Dec. 31, 1934. The figure is before provision for divi- dends in arrears on the cumulative preferred stock of Keith-Albee-Or- pheum. Company's gross income for the period is shown as $41,095,- 206. Among the company's expenses there are included ^245,096 covering amounts paid to officers and em- ployees who participate in the profits of subsidiary companies. This Is in addition to $124,287 charged to administrative expenses of the receivers and trustee. Income from film sales and service amounts to more than ^21,000,000, but It costs the company about as much to handle the business. The Income figures show that the film rentals and sales brought In $21,276,716, while the cost to the company of the film sales and serv- ice, film selling and general .ex- penses amount to $16,162,481 and $3,822,174 respectively. The extra million or so on the Income side may have come from the foreign side although It's not shown, due to rates of exchange and general improverrient of the company's for- eign sales. Income from theatre admissions amounts to $18,290,803; rents and other income, $2,127,686. It is revealed also that there have been claims amountlng~to~$45,000,- 000 filed against RKO, $26,000,000 of which is not .provided for on the company's books. The company is under Sec. 77B of the new Corporate Bankruptcy Act. RKO's operating deficit is $16,078,501, and Its capital deficit Is $10,822,955. The company has written down to nominal value its investments In the Radio City Theatre Corp., the RKO New York Corp., and the RKO Penn Corp..' Among other divisions of expense there Is included film service and production expenses, $4,614,908; ar- tists' salaries, $1,086,507; other salaries and wages, $4,514,676.53. Company's operating deficit Is $16,078,501. Its capital deficit is $10,822,955.42. RK'O's cash on hand is $ 1,659,505 WB Studio Convention Advance Guard Arrives Hollywood, June 4, Vanguard of Warners convention- eers came In Sunday (2) headed by. Jerry Keyser, head of foreign pub- licity, and A. W. Schwalberg, In charge of sales operations. Sales meet opens June 10. W Showing for The Lamping of Wibnington Court Wilmington, June 4. Samuel E. Darby, chief of plain- tiff counsel for General , Talking Pictures and Duovac Radio in the anti-trust action against American Telephone & Telegraph, Western Electric and Electrical Research Products, Inc., opened his defense tonight (Tuesday) with a premiere, showing of 'Oil for the Lamps of China' in the Playhouse for Judge John P. Nields, of U. S. District Court. David R. Hochrelch, who headed Vocafilm and was one of the wit-: nesscs, arranged the showing and brought eight GTP engineers from New York to set up the deForest equipment In trie legit house In 24 hours during the weekend. The picture thus is read into the record of the suit before its general re- lease. Hochrelch represented M. A. Schlessinger, GTP prez. Had armed guards watching the equipment during the night. Admission by invitation only and restricted to the court and litigants of both sides. Printed program does not mention the picture but bills the equipment and concludes thus: 'Without apologies to Electrical Research Products, Inc.' Trial resumed yesterday after another adjournment since last Tuesday. Only routine testimony of ERPI technicians was taken. Warners' 26-Wk. Report Warner Bros, reports a net oper- ating loss, of $133,515, after all charges, for the 26 weeks ended Feb. 22, -1935, the company's second quarter. Company's net operating profit before amortization, depreci- ation and Federal Income taxes, for this period Is $3,151,045. There is $1,193,851 of this latter amount charged to deficit account. The fig- ures cover the company and all subsids. Net operating profit for the pe- riod after amortization and depre- ciation but before Federal Income taxes is $119,736.75. Consolidated balance sheet as of Feb. 23, this year, shows total cur- rent asset.s of $18,848,333.85, in- cluding cash, $4,182,603.80. Current liabilities (other than mortgage and funded debt maturing within one year) are $12,404,441.48. CHAIN-OPERATED SHOW BIZ HGURES TOPS IN U. S. CENSUS ON AMUSEMENTS Washington, June 4. Chain exhibitors and de luxe film houses cut a highly Important figure in not only the motion picture busi- ness but the entire amusement in- dustry, according to first volume of the Commerce Department's na- tional summary of last year's un- precedented census of American business. Revealing the unquestioned eco- nomic Importance of affiliated com- panies and of swank theatres. Census Bureau reports that chains represent only 9% of the 29,737 units In the amusement field, but account for 41% of the $520,218,000 receipts registered In 1933. On the matter of size of establishments, the study discloses that while less than 9% of all 10,265 theatres had total receipts above $100,000 these houses did practically 60% of the film biz. While exact data on the take of chain theatres Is not made available In the, first volume of the national summary, the Ciensus Bureau leaves no doubt of the economic strength of affiliated exhibitors by poinllng out that 'chain units In the motion picture group account for pra>-tic- ally the entire chain representation, and, likewise, the volume of busi- ness of amusement chains is repre- sented, for the most part, by the receipts of motion picture theatres.' The breakdown discloses that 920 theatres accounted for 49.4% of the box office total of $415,153 In 1933, and th.at 54% of all theatres In the aggregate took only a little more than one-tenth of the receipts. Largest numerical group Is the class of houses with annual gross be- tween $20,000 and $50,000, which comprises 2,551 houses or 24.9% of all theatres, but which accounts for only 19.7% of theatre income, $81,- 801.000. A similar condition was found to exist in non-theatrical amusements where 99 establishments, >^% of all places, took 39.1% of the $105,065,- 000 spent for diversion of other sorts than film, vaude and legit. The high degree of concentration of mass film markets is made em- phatic in a tabulation which shows that seven states—California, Il- linois, Massachusetts, New Jersey, New York, Ohio, and Pennsylvania —reported nearly three-quarters of the 920 houses with annual grosses of $100,000 or more and that the top- bracket theatres in these states ac- counted for 7G% of the $205,209,000 taken by the members of this cate- gory. One or more of the larger houses were reported for all but nine states, those failing to show a film or film-vode theatre with a take of $100,000 being Maine, Vermont, South-Dakota, North Dakota, Colo- rado, Idaho, Arkan.sas, New Mexico and Wyoming. Three-quarters of the gross re- ported by 122 legit houses in the country Is accounted for by 20 the- atres witli Incomes in excess of $100,000,000. These theatres took $0,190,000 of the $5,611,111 collected in 1933 at legit box olllces. Chain amusements spent nnd took in more than Indle competitors in 11 ."Jtatc's—Connpcticiit, Mass;iehii- ."-•etts. New Jersey, Pennsylvania, (Continued on page 63) ST. LOUIS ALL SET FOR THE BIG TRIAL St. LouiB, June 4. Though no official local an- nouncement concerning Federal trial of Para,mount, RKO and Warner execs in antl-Sherman in- dictments has yet been made, Dim row here Is preparing for vislte of big boys from New York and Hollywood offices. City expected to play host to evei-y top man In IndustiT next week when final pre- liminaries for trial are cleared away. Date ,^et for actual court battel Is June 17, though local news- papers unable to get line on go^v'- ernment's set-up. So far every- thing handled here with pronounced secrecy, none of the boys on film row or In the theatres being willing to talk for fear they'll put them- selves on the spot. Most of the expected witnesses for both sides pass the buck saying the case le one for the government to do the commenting. List of lawyers lined up by de^ fendant.s looks like attorneys* who's who ■^\'lth such big national figures as Root, Clark, Buckner & Ballan- tlne from Ne^w York and other ace men of thelc/field. Locally the de- fense chief Is Jim Reed, ex-U. S. Senator from Missouri, long a power In the state. Hotel men satisfied -^ith trial taking place here as the film boya are known to be good spenders. Should be an Influx of counsel and execs any day now. But the dope on the street favors closeted con- ferences rather than any social sprees. No announcement yet about what Fed Judge will officiate, though ap- pointment last week of George H. Moore to fill vacancy of Federal bench made by the step up of Judge Fairs to Appellate Court points to this new appointee as the man for the job. Moore's con- firmation by U. S. Senate further argument that no outside Judge Is to be imported for this trial. Unanimous opinion of folks in show business here that this ■will be most Important trial of Its kind local Industry has had In years. N. Y. to L. A, Joseph Eernhard. Sam Morris. D. E. Gri Sam Sax. Max Milder. Robert Schlcss. Mort Blumenstock. Herb Crook or. Wnrren Hull. Grart L. Sear.. A. AV.- Smith, Jr. Norman Moray. Moe Silver. Stanley Shuford. Carl Lesserman. I. J. Hoffman. Monroe Shaff. Jake Wilk. Albert de Courville. William Goetz. Harry Pollard. Jack Durant. Jack Mitchell. Ben Holtzman. Mrs. Jack Allcoate. Ruby de Remer. George Jessel. Norma Talmadge. Michael Simmons. Mrs. Oscar Serlin. Michael David S^rlln. B. Shumlatsky. F. Ermler. V. Nielsen. Rufus LeMalre. Marcelle Chantal. J. L. Saoh.<?. L. A. to N. Y. Loretla Young. Robert Presnell. Mrs. Russell Mack. Nat Lev:ne. M. H. Hoffman. Walter Huston. Francis E. Faragoh. Charles Skouras. Anna Sten. Phoebe Foster. John Leroy Johnston. Gone Towne. Madge Evans, Richard Dix. Frank Parker. Sol Rosenblatt.