Variety (Apr 1939)

VARIETY PICTURES Wednesday, April 8, I939 N. Y. HEARS THAT DEPT. OF JUSTICE MAY RULE 306 STRKE CALL ILLEGAL -Atty.-General's Office Stepped In—If Findings of Illegality Are Upheld, Washington Would Or- der Strike Called Off—Film Execs' Capital Visit Sy BOT CHABTIEB A report on the findings of a Fed- eral inviestigation in New York into the strike of Local 306, Moving Pic- ture Machine Operators, following questioning of union officials, dis- tributors and theatre operators, was forwarded to Washington yesterday (Tues.). Probe Was hurriedly insti- tuted last week to determine Whether the strike of operators, car- rying'with it a walkout of exchange workers, was illegal and in violation of anti-trust laws. Reports in film circles are that official Federal opinion is that violation exists. The Norris-LaGuardia act was- taken into consideration for the pur- pose of determining whether wages and hours were concerned in the strike. . General opinion is they weren't Inuncdiate study and consideration of the opinions resulting from the Federal inquiry at N. Y. is expected froin the Department of Justice and may mean an end of the strike on grounds of illegality. Should the Dept of Justice determine that vio< lation of the anti-trust laws exist, the procedure would be to forward a formal request to the imions to re- turn their men to work at once. Failure to heed any such request, in that event, would no doubt result in a Federal order to compel it, but whether or not any delays, pending action by Washington, might result in continuance of the strike, cannot be said. Report of the N. Y. findings, ar- rived at after only a few days of ex- amination of principals involved, may be made public from Washing- ton this week. Investigation in New York was undertaken' by Federal Attorney McGovern there, together with Berkley W. Henderson, who' is spe- cial ' assistant to Attorney-General Frank Murphy In N. Y., and. Joseph E. BriB, assistant attorney-general at- tached to the anti-trust division in Washington. This investigation was completed following questioning lilonday (3) of former Judge Mat- thew M.' Levy, special counsel for Local 30S. Federal steps . followed visit to Washington last week of Nicholas M. Schenck, president of Loew's; George J. Schaefer, RKO president, and Col. William J. Donovan, coun- sel for Irving Trust, receivers in .the BKO 77-B reorganization. With Intervention of Federal au- thorities. State Mediation Board par- ticicction, Washinston cognizance, ability of film e::changes to keep film rolling and a .general strong stand by the distributors adding up as factors that iccy incline the unions toward a compromise of the strike against distribs, the outlook is equally as strong that the lATSE might carry Its strilre ccmpaign fcr afield if not stopped by the government Against a S^ess that tha unions might back- traclc the russs in film circles is also that they 'have a tiser by the tail and can'l let go now.' Aside from what develops In the direction of medlstibn by state agen- cies in meetings under the super- vision of Jules J. Freund, and as a result of the investii^atlon ordered by the U. S. Attorney General's office, the second week of the. union offen- sive remains a threatening matter and has virtually all branches of op- eration in a jumny state. "This condi- tion of . tiMsity prevails not only among film people, but also in union circles, with the next steps in both camps something to anticipate du- biously on an hourly basis. The greatest apprehension felt, in the event the present strike isn't curbed by Federal or other author- ity, concerns the possibility of a widespread walkout not only in the New York zone, but nationally. It is contended in some circles that the lATSE ambitions for unionization is nationwide and entails not only the •-bootts- and—stage-of theatres, but everyone employed in them, from ceiling to cellar. Moves that have not gained appre- ciable headway in the imlonization of 'everyone from house managers _ialcJharwomen were instituted two years ago. Assistant managers, -treasurers, cashiers, ticket takers, doormen, ushers, porters, advertising men, cleaners and others are includ- ed Id this category. In the van of any such ultimate nationwide campaign by the lA, It is feared, may be a complete mobiliza- tion of American Federation of La- bor talent, more particularly lA members, in the film field in Greater New York. The presumption is that because of the use of persons in ex- changes who are not members of the Film Exchange local, 51-B, a strike- breaking condition would be consldr ered to exist Probable action, if- taken, would be the picketing of the- atres playing film coming from such exchanges, with result the operators and stagehands, in accordance with union regulations, could not cross thie picket lines. When the operators picketed the exchanges this was the technique employed to take the ex- change workers put of the branches. Should the members of 51-B picket the theatres, several unions would be stopped by the picket lines. These would include, in addition to oper- ators and stagehands, the musicians (where employed), plus building ser- vice workers (porters,, cleaners, etc.) and engineers. Lab workers. Local 702; Studio Me- chanics, Local 54, and the (Camera- men's Union, Local 644, if not in- volved through, picket 1Ip»s, might vote to go out in sympathy, the old method, employed in union strikes involving a brother craft Locals 54 and 644 are both in the newsreel plants, however. Par News a Target The Lab Workers, singling out Paramount News last Thursday (30), refused to cross a picket line thrown in front of that plant but, after, offi- cials of 702 were summoned to Wash- ington by Thurman Arnold, they were back servicing Par within 24 hours. Expedient was withdrawal of 306 operators from in front of the Par newsreel and lab over near the Hudson river. Other labs have not been molested, largest (Consolidated) being in New Jersey, and so far there has been do difficulty in get- ting prints through, including for major distribs, newsreels and trailer companies. National Screen, largest of the . trailer outfits, does not employ union exchange workers, and mails much of its film rather than ship it Warner Bros, and 20th-Fox are the largest printers of film in the east, while some companies, such as Metro, have most of their lab work done on the Coast. It is agreed in major circles that If lab problems should develop apart from any gen- eral walkout in theatres or else- where, all printing could be quickly ordered from the Coast Although some exhibitor accounts have been picking up film personally and as early as possible for protec- tion, using their own cars or cabs for transportation, delivery service has not been seriously menaced. Only one service, Horlacher Film Deliv- ery, is refusing to cross picket lines. Although film salesmen, bookers, cashiers and others in the exchanges are developing blisters by doubling jinto 'backroom' duties, film is being moved satisfactorily. In spite'of the difficulties . and . the overtime in- dulged, in none of the branches has there been a missout Shows are being gotten out earlier than normal in many cases, as a matter of fact due to uncertainties, and exhibitors are picking up their shows as much as four and five days in advance. New film coming in is being re- mounted and prepared for use with- out any serious hitches. Flm sales- men and others jumping In to handle this and' other backroom work are being put up in nearby downtown hotels provided by the distributors. They are also being paid for the overtime they work. Inspection Again While last week all exchanges were not undert^ing inspection of film, except to open cans returning from playdates to see if the film looked in-condition'from-casual-In- vestigation, on Monday (3) Par- amount and 20th-Fox began to in- spect and rewind film itselt Pend- ing this action, inspection had been left to accounts, with film also picked up by one exhibitor from another without a trip back to the exchange. Help, mostly persons who. had-for-- merly worked for the exchanges as In^jectors and rewlnders, was put on (Contlnu«d-on-page 17) Strike Becalms 'Em A sidelight on the strike Is the calm around exchanges con- cerning complaints from exhibi- tors, demands for adjustments, etc "Things have never been so quiet in that respect in years,' the boys report. $191,865 U^al Fees In Loew Stockholder Suit; Ellis $64,025 Granting awards in legal fees total- ing $191,865, N. Y. Supreme Court Justice Louis A. Valien'.e on Monday (3) decided the fees to be granted attorneys prosecuting the stockhold- ers' action against Loew's, Inc., Its officers and directors, 'which resulted in a return of $542,000 to liOew's by the five principal directors. EmU K. EUis, who headed the list of attorneys, received $64,025; Abra- ham L. Pomerantz received $20,000; Pollock & Nemerov received $28,500; Bijur &. Hertz receWe-J $17,079; Garey & Garey received $11,886; MUtott L Milvy received $6,000; Maurice Rose received $7,000; Men- den & Mann. received $7,375, and Bernard J, Reis, accountant, was awarded $30,000. No decision has been reached yet on an appeal. The suing stockholders technically can receive nothing for their efforts exc^t a share in the dividends on the balance of the $542,000 after the attorneys' - fees are deducted. The difference will be added to the treasury of the corporation' at the- end of the year and ^ dividend de- clared thereon. Loew's board of directors is sched- uled to meet today (Wednesday) with action on the preferred' divi- dend the principal piece of business. Probable that common diwy action will not be taken until the next ses- sion in May. Common dividend of SO: already has been paid this year. WILCOX IN U. S. TO LINE IR» RKO TALENT Herbert Wilcox, of Imperadio Pro- ductions, arrived from London last week on a quick trip to New York to make arrangements for production of his first Imperadio picture, star- ring Anna Neagle, based on the life of nurse Edith Cavell. Michael Hogan, English scenarist arrived with Wilcox. Imperadio will do four pictures annually, RKO and Wilcox splitting the financing. Second picture this year wUl be "Lord Kitchener," for which Wilcox will also try to line up several RKO people while here. Miss Neagle is coming from Eng- land around May 1. He returns to London the end of this week. Revised Code s New Provisions Sbidio Contracts Hollywood, April 4. RKO tenewed Lee Tracy's pact for two more pictures. Jack Mulhall inked ticket at Metro. Irma Wilson's player option picked up by 20th-Fox. Warners renewed Jo Graham's ticket as dialog director. Columbia signed Ed Kelso, writer. Alan Hale Inked a Warner con- tract Republic handed player ticket to June Storey. Paramount handed actbr deal to Albert. Dekkei,. _.: _. Michael Curtiz renewed as direc- tor at Warners. Perc Westmore signed again as head of Warners makeup department Warners re-inked Olivia de Havil- land. . .. 20 th-Fnx lifted player options of Beulah Bondl and Arleen Wbelaa ^ Noel Langley signed to one-year writer pact at Metro.—^ Revised code of trade practices, which 'was forwarded by distributors to exhibitor associations this week, contains some Important provisions which have been added since the first draft was submitted last November. Cur> rent document which bears the date of March 30 is the second authentic presentation of distributor projppsals. Memorandum is divided into 16 different headings, with .the Important additional prospectus of the creation and working operation of arbitration machinery; In all, the code requires 17 pages of printed matter. In the preamble it is stated that the signatories to the code, being dis- tributors, exhibitors and organized groups of exhibitors of motion pictures, severally bind themselves to the observance of the principles, policies and.practice's set forth' in the draft Following are the salient points In the code:- .1. Exclusion privilege. After reaffirming the schedule of cancellations, of feature'films as previously outlined. (20% of. films licensed tor less than $100 each; 15% when the average is $100 to $250, and 10% for all averages in excess of ^iSO) the code thereafter sets forth the manner of determining the specific number of features that may be cancelled when fractions of numbers occur. It also is explained the manner in which previous season prices shall be averaged when an exhibitor is playing part or all of his films on percentage of the boxoffice receipts. . Western pictures, reissues and foreign language films produced outside the United iStates and imported for exhibition in this country are ex- cluded from the cancellation privileges. Method by which an exhibitor may exercise his exclusion privileges (cancellation) are subject to specific terms and conditions, as follows: '(a) a first run exhibitor shall give the distributor written notice with respect to each feature he elects to'exclude within 14 days after the mailing by distributor of the first notice of availability thereof; any other exhibitor shall give such notice within 14 days after the close of the first exhibition of such feature in the city or town, in which his theatre is located or the mailing of the notice of availability thereot whldhever is later, provided that if such feature is not exhibited on a prior,run in such city or town and notice of availability shall have been previously mailed to such exhibitor, the distributor shall mail to such' exhibitor a new notice of availability thereof and notice of exhibitor's election to exclude such feature shall be given within 14 days after the mailing of such new notice; '(b) the exhibitor shall not, at the time of giving such written notice, be in material default under the license agreement; '(c) exclusions shall be made proportionately among the several . price brackets provided for in the license agreement; but any num- ber of exclusions to which an exhibitor is entitled may be made from the lowest price' bracket; '(d) if any exhibitor, having the right to do so, fails to exclude one qr more features from higher brackels, he shall, for each such feature, have the right to exclude one feature from the lowest bracket; provided, bowever, that if at the time there are no un- played available features in the lowest bracket, be may exclude a feature from the next lowest bracket . 'Upon the exclusion of any feature under this Section (1), the license therefor shall terminate and all rights thereto shall revert to the distributor and such exclusion shall be charged against the number of exclusions to which the exhibitor may be entitled, whether or not a new license agreement for the exhibition of such feature is subsequently entered into by such exhibitor. 'All disputes growing out of the exercise or attempted exercise by an exhibitor of the exclusion privilege provided for in this Section (1) shall be subject to arbl&ation.' In addition to the above exclusion privileges the exhibitor is given the further right of cancellation of any feature *which may be locally of- fensive on moral, religious or racial grounds' provided he stiall give the distributor wriUen notice within 14 days after th^ conclusion of the first run exhibition 'date of the feature in the exchange territory. 2. Trade Annenncement It is provided that each distributor shall make a trade announcement at or prior to the beginning of each of it* seasons (Sept 1) containing such information as it may be practicable to announce at that time with respect to the number of films to be released. 3. Poblic Demand for Exeeptlbnal Feature. This is one of the intricate provisions of the proposed code and deals with the licensing of a' smaller number of films than the distributor's entire season's output It is the intention to provide for licensing of outstanding popular product without compelling the purchase of more additional films than the exhibitor Ik capable of absorbing because of previous commitments with other com- panies. The provision concludes: 'An exhibitor who has been a customer of a distributor and who has refused to contract for such distributor's features for the situation involved shall have no right to attempt to use this Ar- tide to compel such distributor to license to him from time to time 4- its outstanding features. 'Any' dispute as to whether such requested feature Is an "Ex- x ceptional Feature" as above described or as to the number of fea- ' tures which can reasonably be exhibited by exhibitor in such situ- ation or as to whether exhibitor is so attempting to use this Article, shall be submitted to arbitration by exhibitor within 14. days after the refusal by distributor to license to exhibitor the number of features requested by the exhibitor.' 4. Preferred Playing Time. This section treats of designation of play- dates, one of the most debated subjects of the conferences. Specifically, the distributor shall not designate any play-date for any flat rental films, but shall have the right to designate perferred playing time for percentage bookings under the following terms and conditions: If a distributor shall exercise the right to designate features for preferred playing time which it may have under a license agree- ment with respect to. any feature licensed solely on a percentage basis, which is. claimed by exhibitor to be unsuitable for such playing time and if exhibitor shall give distributor written notice of bis objections thereto and the reasons therefor within seven days after the mailing of notice of such designation in case of a first run in a city in which an exchange is located or in any other, case within seven days after the dose of its first exhibition in the exchange City from which exhibitor is served or the mailing of the notice of designation, whichever is later, the question of such suitability shall be determined by agreement between distributor and exhibitor or, lacking such agreement' by arbitration. Unless distributor rejects the claim of exhibitor by mailing notice to ex- hibitor within Seven days after the mailing by exhibitor of such notice of objections as above provided, distributor shall be deemed to have withdrawn such designation. Should distributor, however, reject such claim, exhibitor shall commence arbitration proceed- ings to determine the dispute within seven days after the mailing of such notice of rejection. If the feature is determined, by agreement or arbitration, to be unsuitable for the designated preferred playing time, or the designation thereof be deemed withdrawn as above t>roviaed, dis- tributor may, at its option, either (a) designate the feature to be exhibited upon the same license terms on other days of the week or (b) then or thereafter substitute another feature to be exhibited on preferred playing time upon the terms designated for the fea- - ture objected to; in the latter case the license fee for the feature originally designated shall be such as may be designated by the sUstribUtor y^ithin its right under the license agreement' 5. Some Run AvaiOablc^TEIs clause provides ifrbltntion machinery-to settle differences between distributors and exhibitors of subsequent runs when the distributor already has licensed product to a first run and seeks to protect first run film rental revenue by Exclusive contracts. 6. Befolar Customer. As this division treats with independently op- erated theatres id' competition with- circuit owned houses, it is given in full: , . To meet objections of certain exhibitors to so-called "selling away to a circuit" a distributor will not refuse to license its fea- tures to its regular customer who is not a "circuit customer," in order to license them, for the same run in the same competitive : . j'i:^.«.*4»...Aj_*.. ..^w-. tn\ I