Variety (Sep 1938)

Wednesday, September 28, 1938 PICTURES VARIETY U. S. URGES CONSENT DECREE SILENCE NOT GOLDEN In a business- whose very life depends upon consistent and informative publicity, it is an anomaly that major film companies, placed in the un- pleasant position as defendants of three major anti-trust actions, one of them a Government prosecution, continue a policy of inarticulation at the moment when industry good will is so important to the outcome of the suits. The usual legalistic advice to clients in trouble is to tell them to keep their mouths shut until they reach the witness stand. Silence is the time- worn policy, probably on the theory that a few misplaced statements might further embarrass the defendants. Everyone looks wise and says nothing. There are extenuating circumstances in the. situation which the major companies are facing and which demand an airing of the issues, not to the public, but to the trade itself. It should be borne in mind that any serious disturbance of the Industry's trade practice structure is not a matter of sole concern to the major companies, but equally vital to the interests of the smallest, independent theatre operator, however remotely situated. Col. Bill Donovan and Film Execs Slated to Start Pre- liminary Huddles with Asst. U. S. Attorney, Prof. T h u r m a n Arnold, in Washington This Week Film business has evolved an intricate and delicately balanced machin- ery of distribution and exhibition, in the course of which the cooperation of every account is necessary to the successful functioning of the system. There is nothing illegal in the ownership of a theatre, or a circuit, by a producer-distributor, but the competitive practices which have developed in some territories have, crystallized the ' necessity for a clarification of trade rules for the protection of the independent theatre man. No major producer-distributor, or group, possesses sufficient affiliated theatre outlets for a profitable return on its own output. The independent theatre is an essential unit in the film commercial scheme. It is more than likely if the Department of Justice had deferred its suit, there would be discussions in progress at the present moment towards a settlement of some basic trade problems for the benefit of the independent theatre operator. Plans for such a conference were being made at the time when the Government suit was filed. Industry self-regulation of its own affairs was deferred because of the suit. There is no indication that self-regulation can be attempted while the major companies are defending themselves against conspiracy and restraint of trade charges. It cannot be denied by the major companies that their present predica- ment is due chiefly to their own stalling and procrastinating of the self- regulation program. Whether the adoption of vigorous and helpful measures at any time within the past three years would have forestalled the present Government suit is pure conjecture. This much "is certain, however. The majors would have the benefit of a better record as part of their present defence. They would have vitiated a considerable amount of independent theatre opposition. The Government suit is a wet blanket over the film industry. With some picking up of general business this fall, particularly in manufactur- ing centers, exhibitors were encouraged to contemplate improving their theatre properties and extending their interests. Ample sums of capital are available for this purpose. What is lacking is confidence; the Gov ernment's suit has projected uncertainty in the exhibition field. Denied the advantages of fostering the self-regulation idea, major com panies notwithstanding could do much of a constructive nature by clearly reciting—to the trade—their individual policies, both in film licensing and theatre competition. The independent theatre operator should be encour aged to expand his enterprises along conservative lines, which many are quite willing to do, if they have the assurance of continued cooperation from distributors. Silence and a knowing wink are insufficient guarantees, In a live, throbbing and active industry, a protracted period of inertia, brought about by lawsuits and inevitable appeals, results in widespread uncertainty. There is nothing in the'prevailing relations between films and the public to justify any fears of further downward trend in at tendance, « But exhibition, unapprised of the consequences of the suits, is adamant to progress. Failure to remove the existing dubious impressions may be more costly to the majors in the long run than a bad verdict.' MAE WEST MAY DISTRIB VIA UA UIBnSCH WANTS MBS GAVNOR FOR HAAS ROLE Hollywood, Sept. 27. Capitalized at $5,000,000, Mae West Empire Pictures, Inc., was approved In Sacramento with the directors listed as Miss West, Louis Lurie, Ralph Pincus and James Timony. With a bankroll furnished by Lurie and two other San Francisco capital- ists, the new company starts pro- duction on the first of four pictures early in December lor release in 1939. •Catharine the Great,' starring Miss West, is the first on the pro- gram. It is written by herself. She will star in one more and supervise the production of the other two. Dicker is on for United Artists re- lease. Spingold, Capra East Hollywood, Sept. 27. Nate Spingold and Frank Capra trained east today (Tuesday), Last minute conferences with Harry Cohn at Columbia prevented day schedule <* departure last Satur- Hollywood, Sept. 27, Dolly Haas, who was skedded for the femme lead in Ernst Lubitsch's 'Shop Around the Corner,' is out anc the producer is attempting to get Janet Gaynor for the part. Vien nese actress was at Columbia for a year, at $1,250 a week without mak ing a picture. Lubitsch moved into Selznick-In ternational studio yesterday (M'on.) to start preparations for 'Corner, first production of his new unit .in association with Myron Selznick. Henry Henigson is en route to New York to arrange for a releasing out let. Switch Pix on Henie Hollywood, Sept. 27 Sonja Henie's next picture is 'Love Interest* instead of 'Castles in Nor- way,' as originally planned. C-vitch was announced after a huddle "be- tween the skater and Darryl Zanuck at 20th-Fox. Shooting starts early in January. Miss Henie opens her skating tour in Dallas the first week in Novem- ber and travels east and north • "or about six weeks. T MPTOA Convensh to Take Showdown Stand on Its Self-Regulation Plan U Cuts Losses 450G CRIMINAL SUITS7 Universal reduced its losses in the 13 weeks ending July 30 by approxi- mately $450,000 as compared with a year ago. Company reported net loss for quarter this year at $184,963 as against loss of $627,930 in corre- sponding 13-week period of preced- ing fiscal year. Washington, Sept. 27. Negotiations between the film in- dustry, and the Federal Government, over stipulations which would lead ■;o a consent decree in the New York anti-trust proceeding, get under way i;his week, with the Justice Depart- ment nearing the end of its patience. Whether the majors escape a crim- inal suit, such as the New Dealers jrought against the oil industry, linges largely on the attitude of the film contingent at the conference with Prof. Thurman Arnold, as- sistant attorney general, and the other Justice Department barristers. Talk occurs Wednesday (tomorrow )> with Col. William H. Donovan, com- manding the legal battalion, and leading executives of the harassed companies. Threat of criminal indictments lies behind the Justice Department will- ingness to talk with the industry crew. So the confab may turn out to be one of the most important— possibly fateful—meetings between the industry and the Government. While realizing the scope of the in- junction petition places a terrific burden on the companies, the Justice Department people are nearing the end of their patience and a belliger- I ent, you-can't-do-that-to-me attitude I on the part of the major executives and lawyers may be the thing which will provoke a parade of witnesses before a grand jury. In a Spot The film industry is considered— particularly by lawyers and Govern- ment people who know what went on backstage in the oil case—to be in an extremely hot spot. When the pre- liminary investigation of .trade prac- tices of leading petroleum producers and distributors provided enough ammunition, the Justice Department offered the involved companies a similar chance to play ball and set- tle everything with a consent decree in a civil proceeding. Instead, the oil people, taking a high-and-mighty position and expecting the New Dealers to be awed by their size and financial importance, blustered and thundered. As a result they found themselves on the receiving end of an indictment which not only led to convictions and fines but cost them immense sums for legal talent, in lost time, and prestige. The same fate may confront the film moguls, if they infuriate the crusading New Dealers. While Prof. Arnold talks softly and (Continued on page 61) GN Pictures, Inc., Chartered in N. Y.; Hammons in East Albany, Sept. 27. Grand National Pictures, Inc., has been chartered here, capital stock $5,450,000, the largest figure for any theatrical company incorporated at the Secretary of State's office, Al- bany, in some time. The organization tax and filing fee totaled $2,765, also one of the biggest recently noted at the Capitol, Stock structure consists of 45,000 shares of preferred, at $10 par value, and 5,000,000 common at $1 par value. Directors, none of whom is listed as a shareholder, comprise E. W, Hammons and Jack H. Skirball, 1501 Broadway, and John R. Munn, 500 Fifth avenue, New York City. Sub- scribers, each owning one share of stock, are: Charles A. Brooks, 21 Linden street, Great Neck; Robert J. Reed, 137 E. 66th street, New York, and Graham Whiteiaw, 6 Maryland road, Maplewood, N. J. Snider, Duke & Landis, 26 Liberty street, New York City, filing attor- neys. HAYS HUDDLES CORDELL HULL Washington, Sept. 27. Will H. Hays slipped into Wash- ington today (Tues.), ostensibly without the local- MPPDA office knowing anything about it, to see Secretary of State Cordell Hull con- cerning unspecified industry matters. Hj saw Secretary Hull but five min- utes, leaving the impression the visit could not have been momentous. Though Hays indicated locally that he came down to see Hull on indus- try matters, and not to discuss the war scare from his in ustry's angle, it is believed his chief concern was the Italian situation. He left for New York at 2 p. m. Motion Picture Theatre Owners of America at its annual meeting in Oklahoma City Oct. 30 faces a show- down on the organization's 10-point program of trade reforms. Already members of the association are lining up sides to force some sort of a de- cision. With a membership of around 6,000 theatres and exhibitors, the question of what shall be done about voluntary trade reform undoubtedly will come before the sessions. MPTOA has been attempting to put its voluntary reform pro-am r cross for over two years and industry opinion is that the association must go on record in some .way regarding this vital movement which it inau- gurated: It now appears that the MPTOA will face three, choices: 11) Continue the fight to adopt the 10-point pro- gram by again trying to interest film executives; (2) abandon the whole thing and let the industry go ahead operating as it is; or (3) go to Con- gress and lay all grievances before that body. If the last-named course is fol- lowed, it might produce the spec- tacle of MPTOA lined up with Al- lied in trying to force through legis- lation which both associations might consider necessary for reforming the picture business. Although trying? for over two years, not a single point of the 10-point program ever was uniformly agreed on and placed in effect by all eight major com- panies. It is possible that if the MPTOA goes to Congress, Allied would con- centrate its efforts on seeking thea- tre divorcement legislation. Would concentrate on agriculture states be- cause these are purportedly firmly opposed to chain operations of all types. After knocking off these states, one after another, Allied prob- ably w.'uld extend its scope to other states where larger industrial cities are located. GN Program Set Earle W. Hammons arrived in New York Monday (26) after amalga- mating the Grand National and Edu- cational companies and paying out $150,000 to appease old GN creditors. Next step is to raise operating capi- tal. Meanwhile Edward. L. Alperson has called two conventions of the companies' domestic exchanges, first in Chicago and second in New York. Pictures on the production schedule, including 44 features, 18 westerns and 44 shorts, will be announced at the Chicago meeting next Saturday (Oct. 1). SHEEHAN PRODUCING 'FIORIAN' AT METRO Hollywood, Sept. 27. Winfleld Sheehan's 4 F1 o r i a n,' signalizing his return to picture pro ductioh, gets under way at Metro about Oct. 10. Metro players will be used in the important roles, which include a romantic team, a comic and a horse. Conv. Extended One Day Oklahoma City, Sept. 27. General Convention Chairman Morris Loewenstein announces that one more day has been added to the (Continued on page 61) 3 N. Y. Lerits Go RK0 » Hollywood, Sept. 27. Three young players from the New York stage have been signed by RKO for 'The Pure in Mind,' which P. J. WolfsOn produces. They are James McCalliom, Wal- ter Ward and Charles Powers. Wolf- son scouted players while east re- cently. Lichtman Heads to N. Y. Hollywood, Sept. 27. Al Lichtman trained out today (27) for several weeks in New York. Missus accompanied the Metro exec. TrurJe Mark ftPKlHtei^d FOIINIM5I) BV SIME MII.V1SKA1 AN I'uMImIiciI Weekly by VAKIK/I'Y Inc. Sid Silverman. Prenl'tleni 164 Wcat 40th Street. New Vork City SUBSCRIPTION Annual $8 Foreign 11 Slntile Copies 16 rente I : Vol, 132 No. 3 INDEX Bills 51 Burlesque 50 Chatter 61 Concert 54 Dance 44-16 Exploitation 23 15 Years Ago 49 Film Booking Chart 15 Film Reviews 14 Hou:e Reviews 52-. r >3 Inside—Legit 54 Inside—Music 44 Inside—Pic l ures 23 Inside—Radio 28 International News 11 Joe Laurie. 6 Legitimate .54-59 Literati 60 Music 44-46 New Acts 50 News from th3 62 Nite Clubs 47-50 Obituary 62 Outdoors 63 Pictures 2-23 Radio 24-43 Radio—International .... .28-29 Radio Reviews.. 30-31 Sports ..... 63 Vaudeville 47-50