Variety (Sep 1938)

Wednesday September 7, 1938 PICTURES VARIETY WITH PIX Text of Arnold's 'Consent' Invitation Washington, Sept. 6. Here is the text of the Government's poorly disguised.ultimatum to. the film industry, sent by U. S; asst. attorney-general Thurman Arnold to the Hays office's chief counsel, which so far has been disregarded by the five majors at whom it is directed: • 'As Mr. Williams of my staff advised you over the phohe last week; this department is engaged in preparing the papers upon an applica- tion for a preliminary injunction in order to.make effective prayer one of the petition. The preparation of supporting papers will be Intensive'.' ; 'It will be appreciated if you could communicate with the Ave pro- ducer-exhibitor, defendants and ascertain whether or not they, or any, of them, would consider, stipulating for the entry of such a preliminary Injunction in order to maintain the status quo until the determina- tion of the suit upon its merits or until the further order of the'court 'It would be understood,' of- course, that outstanding obligations and commitments from which, no relief may be obtained would be 'excluded from the operation of such a preliminary injunction.' Communication, dated July 28 and signed by Prof. Thurman Arnold, assistant attorney-general in charge of anti-trust actions, was addressed to Gabriel L. Hess, general counsel of the otion Picture Producers and Distributors of America. SMITH LEAVING UA; CO. MEETS TOMORROW Andy Smith, sales manager under George J. Schaefer, vice-president in charge of distribution of United Artists, is leaving that company. Smith came to UA from Warners two years ago, where he was eastern pies, manager for several years. mere is every indication that the icheduled meeting of the United Artists board tomorrow (Thursday) iBernobn will be;"air ordinary ses- doo. for purposes of discussing cer- tain routine corporate matters in ac- cordance, with company regulations. Any. thought purporting to indicate tfait a new chief executive, such as I president, would be named at this meeting is treated lightly for sev-r cnl reasons. Principal one is that under com- pany-regulations the president of the turn.must also be a member of the bond. Secondly, to name a presi- dent, the: unanimous approval Of the board is necessary. At the moment, wen unanimity of opinion is lacking, but should it be had, the only pos- sibility the board Would name ap- pears to be Maurice Silverstone, chairman of the executive commit- tee. Silverstone is the operating head of U.A., but not a member of the company board. It requires a meeting of- stock- holders to name directors. So-far, Ihere has been none called. The hoard'setup might be altered event- ually,. In accordance with previous understandings of the partners, at *ucb a shareholders meeting, at some future date. The presently scheduled board ses- «ton was to have been held today (Wednesday), but has been post- poned a day in order that Mary Pick- {wd might be 'able to attend. Whether or not the new pact with George J. Schaefer, distribution head °* 'he company, comes up at this ■"eating depends on whether it is »nrpleted and signed by that time. |P far as official indications go, the Schaefer deal is all that'latter wishes «to be. As regards Silverstone, his duties JJ*. authority are governed by coh- ort signed some time ago, so that ■o change could be envisioned or ■ttatemplated therein. • Schaefer's new deal is for Ave Some operating, changes are ex- J^d under the Silverstone rule, *■« already certain economies have «* n put forward since he came into «e company. These are distinctly of "> operating nature. Fun in Durance Vile Hollywood, Sept, 6. rners added $50,000 to the ffif , pf ,BI ackwell's Island' for ad- ^"J'^Miies, particularly in com- JJIchael Curtiz Is working with ""am McGann on direction. Tax Exemption Idea To Encourage Live Shows in the N. W. inneapolis, Sept 6. As a means of increasing employ- ment of flesh-and-blood talent and theatre labor generally by encourag- ing stage presentations, Congress- man Dewey Johnson .of one of the Minneapolis districts announces he'll introduce a bill to exclude all the- atres, playing vaudfllm, straight vaude and legit from the present theatre admission tax. Johnson believes, that the elimina- tion of the tax for the theatres in question would serve as a stimulus to live talent Whatever tax revenue would, be lost directly would be more than offset by direct tax gains through additional tax money from more corporations, individual tax payers, etc., in his opinion. KENT AND JOE SCHENCK BACK; LATTER TO COAST Sid Kent, who has been vacation- ing in Maine, returned to his office in New York City yesterday (Tues- day) coming into town for confabs with Joe Scherick, just back from Europe. Kent returned from his va- cation at Rangely Lakes last month to meet Darryl Zanuck when he reached N. Y. Aug. 1, but went-back after a brief stay. He5s been in Maine for his health. Before returning north early in August. Kent indicated that nothing could be done on the. trade reform program until after Labor Day, if anything at all was done. Schenck and Joe Moskbwitz, his N. Y. rep, leave for the Coast today (Wednesday). U.S. MAY ASK FOR Decision This Week—Wash* ington Still Hopes for Parleys with the Indus* try's Legalists on 'Consent' —Know of the Film Busi- ness' Intention to 'Fight' —Bans Any Moves for Further Theatre Expat* TRUCE MOVES Mrs. Fox Agrees to Open All-Continent's Books Atlantic City, Sept. 6. Compromising still farther in their battle to prevent William Fox's creditors from recapturing asserted assets in All-Continent Corp., the ex-picture magnate's wife last week offered to permit the creditors tc examine All-Continent's books. Mrs. Eva Fox recently offered creditors $500,000 if Hiram Steelman, of Atlantic City, trustee of the $9,- 535,000 bankruptcy, would drop his suit' against All-Continent. Steel- man maintains that Fox, knowing bankruptcy was coming on, trans- ferred his assets to Ail-Continent, a corporation owned almost solely by Mrs. Fox. Selznick's 50G 'Rebecca' Hollywood, Sept. 6. David Q. Selznick paid $50,000 for 'Rebecca,' a British best seller, as a starrer for Carole Lombard. Pro- ducer aims to get Ronald Colman as a co-star. Novel has already sold 50,000 copies in England. It was authored by Daphne. Du Maurier, who wrote 'Jamaica Inn.' Washington, Sept. 6. Decision whether to request pre- li ihary injunctions against the major fll companies named in the Federal Government's anti-trust ac- tion is looked for late this week. With officials still hoping the in- dustry lawyers will consent to open conversations aimed toward a con- sent decree, the Justice. Department appeared to be ■ getting impatient over the continued failure of the principal units to answer whether they will.promise to maintain status quo concerning theatre investments. Matter of waiting longer is one of No More Theatres The film industry, coinci- dental with the original filing of the U. S. Government's suit, expressed itself opposed to fur- ther acquisitions: In fact, spokesmen for the major com> panies, which, have theatre af- filiates, state that long before the U. S. civil action they had decided to do a .little self-di- vorcement on their own. A hew tack is that the in- dies, seemingly inspired by the cloak of Governmental litiga- tion, are the ones going in for the haphazard theatre-building. The majors feel the brunt of this when the indies find themselves embarrassed for film product, due to ' prior commitments, and then they squawk anew to Washington and to the courts via a flock of nuisance sui the propositions Prof. Thurman Arnold, assistant U. S. attorney gen- eral, is expected to take up with as- sociates this week, following absence from his office most of the last fort- night. Silence on the part of the industry for more than a month irks the Jus- tice Department: Only response to Arnold's suggestion of an amicable, agreement, sent to Gabe Hess Of the Hays organization within a week after the petition was filed,'is a curt, non-committal acknowledgment, to the effect that the Government's proposition would be laid before at- torney's for Paramount, Loew's, RKO, 20th Century-Fox, and Warner Bros. In the face of the industry's pro- tracted refusal to take a stand, the Justice Department prosecutors con- tinue to expect the assailed majors (Continued on page 21) Hammons-Alperson-SkirbaU to Set 1938-39 Program for New GN-Educ 1; Minimum of 30 Pix; Jackson's B. R. Coast Preview Famine Hollywood, Sept. Previewers. had a soft snap last week. Only one picture projected for their criticism. Reason for slump is that most studios are either well advanced-in their exhibitor commitments or have quite a few being edited' and cut. Local exhibs managed to do quite well without the preview prop. LONDON MUSIC PUB MAY JAM UP 'ALEX' London, Sept. 6. B. Feldman, music publisher here, is holding out on 20th-Fox in con- nection with musical numbers in 'Alexander's Ragtime Band,* for which clearance had not been ob- tained up until today (Tuesday). Feldman still holds rights to many of the original Berlin'numbers, while Chappell's has the remainder. 'Alexander' opens, at the Regal Sept. 23. . Warners' new thcarre opens with 'Robin Hood' the end of the month 'Saint Martin's Lane' opens at the Carlton in October. G0ETZ BRINGING M-G'S 'CITADEL' FROM LONDON London, Sept.-6. Metro's 'The Citadel' has been completed. The sneak preview p-roving.sati.sfy- ing, Ben Goetz sails with it on the Nbrmandie Sept. 7. Flack Makes Good Hollywood, Sept. 6. Lew Smith, former Paramount flack, has been lipped to ; associate producer in the Frank Lloyd unit. He gets screen credit as such in 'If I Were King.' Pix at Crossroads, Says PettijohuVGov't Policing, or Self-Reg Milwaukee, Sept. 6. Claiming that the industry today is at the fork of two roads—self regulation or another which is to be policed by a cop—Charles C. Petti- john, of the Hays office, outlined his conception of the' film business as it currently exists, in a talk be- fore the Wisconsin Motion Picture reunion here last Wednesday (31). 'If we follow the road of self- regulation we can continue to con- duct our own business,' he said. 'The other road provides us with a po liceman whose beat is changed so often he can never learn the busi- ness. If any of you are thinking of taking this road, I beseech you to reflect just for a moment on the fate of other industries which have felt the throttling grip of political con- trol. 'We are still free to choose the road we shall travel. I am old- fashioned enough to believe that self- regulation is the correct course, not only for ourselves but for the public we serve. We haven't long to make up our minds, and by 'we' I mean all of us—exhibitors, distributors arid [ producers. We cati ! t just stand still j and do nothing. The forces, in and out of the industry, which would put us under thumb are on the■ march. And we need a united front. | i 'First necessity in self-regulation of j our trade..problem's is to adopt-the j principle of live and help live. This : industry cannot operate successfully under any system which would give j one group unfair advantage over another. Every, group must have equal opportunity to do business and I slay in business. . . . All that is re- | quired is good faith, integrity and common" sense. If we have the will to act, the methods of self-regula- tion are easy to find. To help us make up our minds we don't heed courts., and lawsuits, we don't need legislatures and .laws. Exhibitors, distributors 'and producers must make the decision for themselves.' Cancelling prior plans to discuss initial'season's lineup over the Labor Day weekend at his home in Ma- maroneck, N.- Y., E. W.- Hammons went into huddles yesterday (Tues;). with Edward L. Alperson and Jack H. Skirball to lay out the 1938-39 program concurrent with immedi preparation of papers for incor ra- tion of the'company that will reprer sent the merger of Grand National and Educational. . Haste being im-' perative in view of the lateness of the selling season, the entire '38-39 setup will: probably be set today (Wed.) or, at the latest^ by the end of the week. Under plans to proceed conserva- tively the first year, the season's out« put will/number at least 30 features the initial semester.. How many more might be made, if more, not decided, nor just what shorts sched- ule will be. Shorts will carry the Educational label. Having under consideration nu- merous substitute titles, the tentative, name of New Grand National may be changed. If something else isn't accepted, old company's' name of Grand National Films may- be changed to Grand National Pictures, Inc., Hammons having dislike for the appellation 'New' which is being tentatively used to designate the ac- quired GN organ! tion.' Coincident with Immediate plans for a program schedule for '38-39 and incorporation of the merged GN-Educatlonal companies, ' ac- countants are at work making-audits' which will be forwarded to Wash- ington for the information of tho Securities & Exchange Commission. This will require about a week or 10 days, in the opinion of Hammons. Having approved the stock setup for the'new GN company meantime, the underwriting, of the securities of GN will be set and officially, announced when the audits now under prepara- tion are filed with the SEC. Ham- mons states' two large houses are interested in the underwriting. They are not disclosed pending'completion of official procedure with the SEC The initial payment under the ac- quisition of GN by Hammons, (Continued on page 15) VARIETY Trnfle MhtU n»Kl>.terrd Pnil'NDRH \\y KIMB HII..VRRMAN I'iiIiIIhIimI Mrcklv lij VAKIKTV. Inc. Mid Sllvori'ii.m. l't>Rl,|enr IM Wfsl 4Cth Slrei-I. Nmw York Tlfy suHsonji-rioN Annual 16 Foreign 17 Slnule Cnnlos IS <-«nl» Vol. 131 120 No. 13