Variety (Apr 1936)

VARIETY P IX ¥ IRES Wednesday, April 1, 1935 WB's Horror Yen Phone Co. Paid Back All But $800,000 at 12% Interest—-Loans Via Erpi and Subsids—-Indie Producers and Quigley Publishing Co. Listed Washington, March 31. Activities of the American Tele- phone & Telegraph Co. in financing production of independent motion picture-s, as well as in ousting Wil- liam Fox from h|s important in- dustry position, were laid bare last week as the Federal Communica- tions Commission continued its in- vestigation into accounting and operating methods of the telephone trust. Millions were invested in the film Industry to further the use of sound equipment, the commish learned from accountants who have been wading through telephone company files for more than a year. In its capacity as anigel for indies, A.T.&T. loaned $3,413,400 during a three-year period, and has still to get back $800,000 of its Investment. The commish dipped into the con- nection between the telephone sys- tem and the complicated financial operations related to Fox. Films in 1929, while William Fox, ducking a warrant issued by Federal Judge Bondy in New York, sat in an ante- room avidly reading, the transcript. Little , more light was shed on this subject, however. The commish in- quiry on. the whole merely substan- tiated Fox's story of dealings with Electrical Research Products, Inc. The Fox loans of $16,000,000 were made ostensibly to further the use of sound picture, equipment and promote development of audible pic- tures, according to evidence dug up by Samuel_MeIsells t F. C>..C.*, sleuth.' furnished cash with which Fox re- paid' telephone company loans, sub- stituting" two new debtors (Halsey, jStjuart Co. and Harley"L; Clarke) for the original borrower.. Jhe commish discovered "that; the $15,000,000 which Fox borrowed.front ERPI in 1929 wlien his companies were, in financial distress, was passed along the line by various telephone system corporations and did not come out of ERPI funds. On the day that -the loan was made, Feb, 26, 1929, A.T.&T. advanced $i2,000,r 000 to Western Eectrlc; Western Electric loaned $15,000,000 to ERPI; and ERPI played Santa Claus for Fox. Roundabout Setup The reasons for this roundabout proceeding were not brought out, but the commish did discover that the money was later repaid in full when .Qtjier loans.were madevto the Wall street flrni -and 'Clarke. 0 " The inquiry disclosed ERPI as big banker* for. the- telephone' company and angel for .numerous units of the film industry, as well as pal of the Quigley Publications, which borrowed $50,000 for Motion Picture Dally and Exhibitors' Herald. The. bulk of the production loans were made to small companies, many relatively unknown. The list fol- lows: Ben Hecht and Charles McArthUr, for 'Crime Without Pasion,' $183,- '971; for 'Once- In a Blue Moon.' $307,000; for 'The Scoundrel,' $187,000. John Krlmsky and Gifford Coch- ran, for. Emperor Jones,' $168,020. Exito Productions, for 'Downhill' (also titled 'The Downfall'), $71,000; 'His Unofficial Fiancee' (also titled 'Love Among the Skyscrapers'), $81,000. Arnold Corp., for 'The Great Ad^- venture' (also titled 'His Double Life'), $70,000. Acord Theatrical Productions, for •A Plain Man and His Wife/ $7,000. Educational Productions,, for va- rious shorts, $180,000 in 1933-34 and $279,000 in 1934-35. The loans were made to com- panies- using the A.T.&T. New York studio, with interest at 12%; the commish learned. The money was handed out . through Exhibitors Re- liance Corp., subsid of Erpi, in co- operation with the Chase National Bank, which played a prominent part in the Fox financial gyrations. Erpi-Quigley Martin Quigley, of Quigley Publi : cations, picture trade paper publish- er, figured twice in 2 days last week at two different hearings. A $50,000 loan by lectrical Research Prod- ucts, Inc., through its subsid; Ex- hibitors' Reliance Corp., on June .30, 1932, came up in the A. T. & T. hear-; ings. Federal Communications Commission's probe of American Telephone & Telegraph Co., activi- ties disclosed that the phone com- pany subsid had advanced a total of 3,413,400. for film production. Among this was the $50,000 to Quigley Publishing Co. Latter company then issued the following statement: : 'On June 30, 1932, at which time, on account bt the depression, the normal sources of credit to. legiti- mate business were, closed, Quigley Publishing Co. negotiated a credit, in amount of $50,000, with the Ex- hibitors' Reliance Corp., .a sub- sidiary of Erpi: 'The credit above referred to was negotiated in full and mutual re- alization of thd fact that it in- ' volved ho implications or commit- meixts beyond, or in addition to, repayment' with -interest at the normal rate. Repayment in full, together with interest, was completed on April 18, 1935/ " Qulgley's name- also came up : during the Pettehglll blockbook-; ing hearings when H. M. Richey, 1 of Detroit, assailed the film distributors.' Rlchey's attack was directed against Dr. Daly, who ap- peared as representative of the Catholic Bishops' Motion Picture Committee, and Quigley, whom he called Dr. .Daly's 'Man Friday* and the 'producers' Catholic contact Reissuing Rogers Hollywood, March 31. Twentieth Century-Fox reissuing 'Connecticut Yankee' for a test run in Indianapolis opening April 3. to get public reaction to old. Wijl Rogers releases. It was the most lavish production given Rogers. Picture had Myrna Loy in the femme lead. Hollywood, March 31. Boris Karloff, presently in Eng- land, is. being; angled by Warners for series of horror" features, patterned after 'The Walking Dead,' which be, recently made for that studio, Pictures would be sandwiched in between films he is committed to make for Universal. U. to Educate Cutters in What masters.' Charles C. Pettijohh, gen eral counsel for the Hays organiza* tion, then talked in defense of Quigley and asked the committee's permission to file a detailed answer to the charges. TOBY WING TO ROACH ON A TERM CONTRACT Hollywood, March 31. Toby Wing, currently in. the- east, Is to report to Hal Roach on a termer. First assignment will be opposite Jack Haley in 'Mr. Cinderella. Studio figures to give the actress a buildup. Hollywood, March 31. So that cutters will' be more fa miliar with what directors want In pictures, and as an economy meaS ure, Charles R. Rogers, Universal production head, Is stationing a head cutter on set through entire shoot ing of film: Plan is in effect for the first time on 'What Price Pa- role. 4 ' If successful It will "be Invoked on all pictures at plant. HAYS RE-ELECTED FOR 15TH CONSECUTIVE YEAR Will H. Hays was reelected pres ident of' the Motion Picture Produ for" the i5fh~c6nlecutrve' : year at "the annual meeting of the association held Monday (30).' F. L. Herron re elected treasurer; George Borth- wick, assistant treasurer, Carl E Milliken, secretary.. Entire directo- rate retained. Hays in his annual report read at the yearly meeting touched-on de- velopment of color, the Production Code Administration, high standards of artistry attained by the screen in past year, etc. AMERICAN BALLET'S FILM, WHEN AND IF Lincoln K/irsteih, director of American Ballet, returned from the Coast .last week, where he negoti- ated for the dancers, now appear- ing at the Metropolitan Opera, N. Y., to do a film. Story, trouble has held a definite deal up for some time, it's understood, though studios are now watching 'On Your Toes,' musical coming info Broadway, as a picture possibility. If pacted, George Balanchiiie, ballet director, who staged 'Toes* numbers, would prob- ably repeat his chores in Hollywood. Kirsteln also dickered for a Holly wood Bowl date this summer for the group. Appearance, however, would be set when a corresponding film assignment ■Would. assure' the danc ers of studio work. Once a Ky. Cot, Always a CoL> Says Ex-Gor. Laffoon ' Louisville, March 31. Kentucky Colonels, to the. number of some 17,000 were in a quandary as to their exact status, upon learning of the recent ruling of Attorney General Beverly M. Vincent, voiding the honorary titles in. Kentucky and elsewhere. Vincent laid down the opinion that since Gov. A. B. Chand ler took office last December, and since that time has appointed no honorary aides, th ose appointed Coast P. A/s on the Move Hollywood, March 31.. GeneCohn, former columnist for Newspaper Enterprise Association in New York, joins Paul SneJl as assistant in Pioneer's publicity de- partment. Was set by Steve Han- agan, public relations rep for Jock. Whitney in New York. Ed Ellis joined Paramount pub- licity staff last week as unit man. Bob Hussey, formerly with Para- mount and Warners, moved into Co- lumbia publicity during week. Bruce Gallup has joined Univer- sal's publicity staff. Other additions are expected as the department's budget is upped under the new regime. McCoy Troupe East For Garden Opening Hollywood, March 31. Col. Tim McCoy opens Apiil 8 as feature-attraction with the Ring- ling Bros.-Barnum & Bailey circus In Madison Square Garden. McCoy, with troupe of 40 cowboy actors, pulled out for New York last weekend, to remain with circus until November. Flock of Sunset Strip Niteries Folding Fast Hollywood, March 31. Group of night clubs spotted on the Sunset Strip, Hollywood's live mile between this town and Beverly Halls, are folding fast. When re- peal became real, boys who saw a soft meg or two in view all hustled to the strip and opened two-by-four spots -with intimate entertainment. There's a dozen to the mile. During the past few weeks half of them have folded, with' the sheriff now in the night club business. Those that closed are the Envoy. Jubilee, Sav'ille, Russian Eagle, El Ray and Kings. To make it positive, latter closed twice. matically lost their upon retirement of Governor Ruby Laffoon who issued them, Former Gov. Laffoon, whose ap- pointment of. Colonels, Admirals Majors and Captains numbered' sev- eral thousand, has issued a state ment from his home in Madisonyille, Ky„ declaring that ,'onc© a Colonel always a Colonel.' Marty personali ties in the amusement world have been the recipients of the honorary title, and according to the former Governor the practice has brought much favorable publicity.' arid ;gopd will to the. Commonwealth. No political significance is seen in the move to demote .the honorary of fleers in Kentucky's mythical army and navy, and Gov. A. B. Chandler has indicated that he doesn't expect to appoint any Colonels du.'ing his administration. Stone's 20-Fox Quintet Hollywood, March 31. John Stone has been aslgned pro- duction of five pictures at 20'th-Fo^ by Sol Wurtzel; executive producer. First to get under way will be Jane Withers starrer,, 'Public Nuisance No. 1,' commencing middle of April. Next on Stone list'will be Techni- color production of 'Ramona,' slated for May 1 start. Other three will be in the Charlie Chan series. Hold McGuire at Metro Hollywood, March 31. Although he had deal pending with Samuel Goldwyn to write, screen play for first 'Goldwyn Fol- lies,' William Anthony McGuire has signed a two-year straight writing contract at Metro. Goldwyn also reported negotiat- ing with Seymour Felix to stage numbers in his 'Follies.' Just Practicing Warner Bros, music publishing contactees on the professional staffs, principally executives who have been retained because of contracts and other reasons, are now more or less in training when making tht> rounds. They see the plugs in almost the usual routine, but it's of little prac- tical avail because of. restrictions against WB tunes. It's getting to be quite irksome to the songplUggers who land mythical coast-to-coast plugs and still salve the. band boys, ct al., but with no real evidence of their efforts. is, March 31, After prolonged hearing j n chambers Friday (27) U. S. Judge Charles B. Davis allowed an. appeal to WB . Pictures, .Inc., Paramount and RKO interests from decree of Federal Judge Joseph W. \loly- neaux, of Minneapolis, last Jan. 29 which permitted the government to dismiss the -antittrust. suit against the film interests without prejudice to filing suit again. A new suit was then filed In New York charging the film groups 1 and 30 execs with conspiring to violate Sherman anti- trust act by withholding film prod- uct from Ambassador, Missouri, and New Grand Central theatres here. It . is believed the appeal, which is direct to the U. Supreme Court in the anti-trust cases, will prevent prosecution of New. York litigation until the highest legal tribunal de- termines points raised oh dismissal of local case. Assignment charged Judge Moly- neaux. erred when he failed to deny government's motion to-dismiss and when he failed to hold that issue in the equity proceedings had be- come res adjudicata (already ad. judicated) by virtue of verdict of a jury last Nov. 11, which acquitted a number of corporations' execs of. anti-trust misdeameanor charges. United States District Attorney Blanton opposed granting of appeal on the ground that since suit had not been tried on its merits Judge Molyneaux' decision was not ap* pealable. LEW GENSLER'S 5-YR. Hollywood, March il.. Paramount has ' * tabbed Gensler .to a new five-year ing contract. Gensler, who joined Par prpduc« tion staff year ago, will make 'The Duchess,' starring. George Raft, as his. first under new ticket. UA's Washington Debut Of Wells''Things to Come' Washington, March 3i. First U. S. showing of Alexander Korda's 'Things to Conje'* (UA) will be at swank preview April 7 at Wardman Park hotel, arranged by United Artists and local Loew's office. Sir Ronald Lindsay, British am- bassador, has agreed to head '.list of 450 guests which will include Cabinet members, Congressional leaders, educators and representa- tives of nearly every embassy ..end legation in Capital. Author H. G. Wells is scheduled to do radio talk from London, which will be piped into hotel preceding showing of film. Preview will also . „ . - j . tu^t,. be preceded by dinner for local niETY's staff have reappeared in theh criUcs - and . dranm edltors from Bal- timore, Richmond, Norfolk and Wilmington, to • be brought to city by U.A. Among the 17,000 colonels made by Governor Laffoon, of Kentucky, and now declared to be mere guests at a masquerade party that's .over are many in radio. L. B. Wilson, of WCKY, Covington, has plenty of them on his conscience. Jay Flippen, of WHN, New York, who has been calling himself Col. over the air this week.. drops the title, Kentucky in vintage, and be- comes a private once more. Five Kentucky colonels on Va- original all-mugg condition. Newcomer Op Crosby Hollywood, March 31. Frances Farmer, tabbed to stock contract by Paramount last Sep- tember, steps into femme lead oppo- site Bing Crosby in 'Rhythm on the Range.' Production under way with Nor- man Taurog directing. Friede Into Pix Hollywood, March 31. Ddnald Friede has resigned from the Covici-Friede publishing com- pany to make his home here. Understood that he negotiated a story exec spot with a major studio during his last three-month stay here. Cooley Wants His 10% Cut Lbs Angeles, March 31. Ralph Forbes sued in municipal court by Hallain Cooley agency, charged with failure to pay com- missions due. Complaint alleges actor neglected to pay 10% on $10,:100 asserledly earned by his work in Metro's 'Romeo and Juliet.' Crosby, Oakie to Team For Indo-China Yarn Hollywood, March reach of Dreams' will serve, as co-starrer for Bing Crosby and Jack Oakie at Paramount. Story is laid in Indo-China. Norman Taurog directs. Sheehan Back on Coast Hollywood, March 31... <. Winfleld Sheehan trained ihj 1 ^. yesterday (Monday) from -N- after being held up a day by flood** and missing train connection''-. ( Contracted a cold en route and - not discussing his future plans .M»' til recuperated. Walsh's 'Spendthrift' Hollywood, March. Walter Wan go- has signed Hao- Walsh to direct 'Spendthrift.- Henry Fonda and Madeleln* Carroll are in the leads.