Variety (May 1939)

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'W'ednesdaj, May 3, 1939 PICTURES VARIETY t MORE U.S. SUITS TO FOLLOW Griffitk^Hlfelcomes' U. S. Suits; Should Qarify Cham's Position Oklahoma City, May 2. " Action within a week or two Is ex- pected on the Injunction asked by the Department of Justice against Griffith Amus. Co., four of Its com- panies and 10 defendant distributors. Actual trial of the Government's suit filed in U. S. District Court here last week is not expected to begin for some time. No statements have as yet been Issued by Griffith officials who have been conferring with their attorneys and with distributor attorneys with regard to the suit, although it Is imderstood from official sources that Griffith executives welcome the Gov- ernment action, 'since we knew it was coming eventually and we would Just as soon that our position be cleared up at the earliest possible moment.' Acting oh behalf of the anti-trust division of the Department of Jus- tice, Charles E. Dierker, Federal dis- trict attorney, after returning from Washington, filed a suit for injunc- tion against the Griffith companies and distributors to prevent alleged acts and combinatiotas in restraint of trade. Named defendants are: Grlf. flth Amus. Co., Consolidated Thea- tres, Inc., R. K Griffith Theatres, Inc., Westex Theatres, Inc., L. C. Griffith, H. J. Griffith, R.-E. Griffith, Paramount, Metro, Loew's, Inc., RKO Radio, Vltagraph.. Universal,' 20th- Fox, United Artists and Columbia Pictures. It is understood that selection of the Griffith companies was made be- cause the Griffith setup is the largest of Independent circuits now oper- ating In the U. S. and wotild not be covered by the outcome of the Gov- ernment's suits In New York which attempt to divorce, producers from their theatre circuit holdings. Investigators for the Department of Justice have been at work in the Southwestern territory for several weeks taking testimony from Inde- pendent operators, from Griffith op- position where It exists and doing research work in exchanges here. The guiding hands behind the new Independent buying pool which Is to be formed here next week are also ■aid to have aided Department of Justice men In their Investigations. Similarities to Homand Suit Similarity to the A. B. Momand ■ults was pointed out by local offi- cials also. These two suits, asking $4,500,000 damages of Griffith com- panies, pro,ducers and distributors, are based on practically the same charges embodied in the Department of Justice bill of complaint. The Momand suits were filed five years ago, re-filed last year and are today ctlll resting In preliminary stages with demurrers of defendants being heard. Action In the Momand cases Is also expected shortly. 'For the past five years the defend' •nt exhibitors have constituted a combination with each Other and with each of the defendant distrlbu. tors to unreasonable restraint of In- terstate trade and commerce In notion picture Alms and to monopO' llze the first and second run exhibl. tlon of feature pictures and the oper- ation of first and second run thea- tres In the Griffith towns In viola- tipn of Sections 1 and 2 of the Sher- njan Act,' the Governments com- plaint alleges. „ GrWth Amus. operation includes the following locations and number of theatres: Oklahoma—Ada (3), BartlesvlUe M). Blackwell (2), Chandler (2), Duncan (2), Elk Clty .(l), Enid (5), Cuthrle (3), Henryetta (2), Hobart Hugo (2), Norman (3), Okla- noma City (1), Okmulgee (4), Sem- (4), Shawnee (8), Stillwater Texas—Borger (3), Kermlt (2), ftBjpas (3), Wellington (2), Wink Consolidated Theatres, Inc., has me following locations and number M theatres: ,.9'dahoma—Altus (3), Chlckasha n''u.'^'""">«''e (2), Clinton (2), iipWng (3), Drumrlght (3), Fred- (3), Holdenvllle (3), Hominy (Conthiued on page 18) Why No 'Consent' A major reason for the unwill- ingness of the major companies to come to any agreement with the Government, over a consent decree was revealed during the week by a Government siwkes- man. He states from knowledge that there are hundreds, if not thousands, of small theatre own- ers who, if the Government suit proved successful, would bring similar actions based on the same charges throughout the country. It Is not the Intention of the ' U. S. to seek money damages In its anti-trust action. But should they win,, the 'small theatre own- ers can file their actions, claim- . ing violations of the Sherman Act PhiDy Exhibs Admit Distribs Not So Tough Philadelphia, May 2. Exhibs here were willing to agree this week with their brethren in New York that distribs are going easier on them this year in their ap- proaches for the new'selllng season. Whether It's a realization that b.o.'s are sharply off from last season or whether it's inspired by Washington legalists, exhibs are unable to say. They do agree, however, that the ex- change managers and their Salesmen are not so tough as they once were. Accustomed to being asked for a tilt in rentals each year, many ex- hibs claim they are being pleasantly surprised by the exchanges. Several companies are asking for no increases at all, while others are requesting very moderate slants—which the ex- hibs. maintain they know they won't get anyhow. Metro in many situ- ations Is only boosting two alloca- tions, changing a pair of 25%ers to 30% and 30%ers to 35%. Fox is de- manding a sligl.t raise and Warner Bros, is no tougher than last year. On the other hand, there's no con- certed move by exhibs to delay mak- ing deal—which has been particu- larly prevalent In this territory for the past two years and whic'.i has been very costly to the exchanges. Exhib organizations are sending out their usual warnings, but there seems to be less real force behind them than in the past Some exhibs, of course, are still doing their usual weeping and wail- ing about exorbitant rentals and un- fair practices in cases where dis- tribs feel there Is particularly neces- sity for upping prices. They are much more in the minority, however, than In the past WB TO MAKE BIG PIX WITH TOP STARS IN ENG. London, May 2. Warners is out to produce big pic- tures suitable for both sides of the Atlantic and Intends to bring over James Cagney and Paul Muni, among others. Joe Henaberry Is coming to direct H'wood Calls Bromberg Hollywood, May 2. J. Edward Bromberg accepted a telegraphic contract from Darryl Zanuck to play a role in the forth- coming 'Hollywood Cavalcade' at 20th-fox. He just closed in 'Awake and Sing' on Broadway, and Is due here May 15. NIX ON 'LOGAl MONOPOLIES' Latest Suit Against Four Texas - New Mexico • Okla- homa Circuits Is Forerun- ner of a Series in Several Localities CONCERTED DRIVE Washington, May 2. Several supplemental anti-trust cases, patterned after the equity at- tack on four Texas, New Mexico, and' Oklahoma circuits (Griffith) launched last week, are contem- plated by the Justice Department to back up the suit against the major producer-distributors and affiliated exhibitors. - Policy announcement Friday (28) said the suit filed In Western Oklahoma federal district court Is merely the first of the series under preparation for several months. Rumors of a concerted drive were substantiated when Prof. Thurman W. Arnold, assistant attorney-gen- eral, annoimced the Government's objectives cannot l>e realized with- out breaking up ' 'local monopolies.' The Southwest action was the first docketed merely because the investi- gation came to a head soonest Next case or two may be unveiled In the coming week, although D. J. officials are heslstant to make specific pre- dictions and will not Indicate which one of several exchange territories may be the locale. Shortly before Arnold's statement, Attorney General Murphy revealed the Federal crusade against alleged film monopoly will be extremely broad. Several cases are l>eing per- fected as was forecast in Variety several weelis ago. ' - Applause from Allied States As- sociation followed the D. J. move against the Griffith Amusement en- terprises. .The Oklahoma suit 'sec- ond in importance only to the omni- bus proceeding against the Big Eight filed in New York last July,' was termed by Abram F. Myers, general counsel of the Indie outfit a complete . substantiation of th^ claims of the non-affiliated exhibi- tors and an effective argtmient in favor of the Neely bill. Counteracts the propaganda dished by the majors, he declared. The action demonstrates.that,.th^. Federal government will not tolerate monopolistic practices by anyone, Myers said In a bulletin to Allied membership. Does not necessitate the need for further concessions by the majors, however. Remarking on the prospect of more suits Myers called for a thor- ough prol>e of the Motion Picture Producers & Distributors of Amer- ica, hinting at action in the fall. Job of correcting unwholesome condi- tions in the film business will not be finished 'until there has been a thorough firing of the manifold ac- tivities of the Hays Association,' he declared. Propaganda and lobbying activities require intensive scrutiny, according to the Allied leader. Arnold's Attitude The policy pronouncement by Prof. Arnold recited the grounds set forth in the New York suit and em- phasized the need of eradicating 'chains of theatres exercising mo- nopoly power in various sections of the country,' In addition to break- ing the link between the chains and major distribs. 'If the major producers are de- prived of control over local theatres, they must have for themselves a competitive market of truly inde- pendent theatres in which to dis- tribute their product,' the assistant A.G. said. They must not be at the mercy of local monopolies which control the market in particular areas. "To leave the chain theatres In control of the market after divesti- ture by the major companies would be simply to substitute a number of local monopolies for the national (Continued on page 18) Trying to Rush the Arbitration Machinery^of Trade Practice Code Before New Selling Gets Much Older Actor hf Thrust Hollywood, May 2. James Preston became a Holly- wood actor by accident after 36 years as superintendent of the U. S. Senate press gallery In Washington and more recently assistant custodian of Govern- mental archives. Brought to Hollywood by Frank Capra as technical advisor on 'Mr. Smith Goes to Washing- ton,' Preston was drafted as a thesp. His screen role Is super- intendent of the Senate press gallery. Special Master To Decide on U.S. Vs. Be&K. in Chi Chicago, May 2. Government suit against Balaban & Katz and six major distributors on charges of violating the consent decree issued against them In 1B32 restraining them from violation of the Sherman anti-trust laws has been set before a special Master in Chancery. Edgar Eldredge was named by Federal Judge Charles E. Woodward, who has been on the case, and May 17 is the date for the introduction of evidence in the Gov- -emment's charges that the de- fendants maintain a monopoly In films. Judge Eldredge gave the Govern- ment a big point when he ruled okay on the U. S. petition to examine the records of all the companies In- volved in the suit Robert L. Wright assistant attorney general at Washington, appeared for the Government along with War- ren Canaday, district attorney^ Indle-B. & K. Salt Stalls Suit of the indie exhibitors against Balaban Se Katz and the major distributors charging re- straint of trade is being stalled, due, in .some measure, to the-preoccupa-- tion of plaintiffs' attorney, Joe Rosenberg, in the current Moses An- nenberg tax case. At present the two sides are In- volved on the question whether or not the plaintiffs (the indie theatres) shall open their books to prove their contention that they have been In- jured by the tactics of the de- fendants. SELZNICK-UA TO SIGN 3-YEAR DEAL ON COAST Contracts' on the new three-year re- leasing deal of Selznlck International Pictures by United Artists Corp. have not been officially signatured. Final okay .had been held up by re- cent Illness of John Wharton, attor- ney for John Hay Whitney and S-I. Wharton left New York for the Coast last week to close deal out there and is now waiting arrival of Murray Silverstone later this week. Free Commercial London, May 2, James Roosevelt, vice-president of Sam Goldwyn productions, who has been in Great Britain studying the foreign situation, sails for the U. S. tomorrow (Wednesday) British Broadcasting Corp. was very anxious to have young Roose- velt on the air. He agreed to ap- pear on condition they allowed him to mention 'Wutherlng Heights.' Generally plugs are taboo by the BBC, but he got it Initial steps having been taken during the past week toward build* ing up a structure to govern arbU tratlon under the trade' practices code, a satisfactory basis for han- dling disputes may be worked out, legally and otherwise; in time to carry Impoitant weight before ths selling season has advanced too far. It the machinery- of arbitration, as it will function, can be set up pend- ing ultimate action of exhibitor groups on . the self-regulation coda itself, then Allied States Assn. and other recalcitrant exhib bodies may be Influenced toward ratification ot the code. Understanding is that Abram F. Myers, chairman of the board of Al- lied and its general counsel, is In- clined to favor consideration of th« final trade practices draft If the de- tails of arbitration are worked oiit first Allied turned the code 'down unofficially by refusing' to convene the board of directors to consider It, one of the principal reasons being that the draft did not embrace the exact methods under which distribu- tor-exhibitor disputes would be set- tled. The Interinountain Theatres Assn. of Utah, one of the key groups throxigh which the distributors have worked In setting up the code, also turned It down without specifying reasons but believed that this local exhib imlt may also be encouraged to reconsider if the distribs can get the arbitration, structure set up quickly. Some other exhib bodies have accepted the code in principle bui conditionally upon the arbitra- tion methods to be employed.. These Include the Independent Theatre Owners Assn. of Greater New York which, along with other groups, are making su.<;gestlons concerning ar- bitration. An Important point seems to be the methods under which arbi- tration boards will be chosen. During the past week recommen- dations and .suggestions concerning arbitration were made by the dis- tributor group, headed by William F. Rodgers, general sales manager of Metro, and lawyers who have started to summarize them to determine (Continued on page 45) Tntlt Mark RPKlilcred POUNUEb BY SIMB SII.VBHMAN PablMinl trerkljt by VARIETY. Inc. Sid tjilvennan, Praalilant Itt Weal 49tb Street. New York City SDDSnRtPTION Annual flO . PorelgD fll SlnRfe Coplaa 26 Cenit Vol 134 im No. 8 INDEX Bills 46-47 Burlesque 43 Chatter 53 Dance Bands , 38-40 IS Years Ago 42 Film Reviews 16-20 Film Showmanship....... 8 House Reviews 49 Inside—Legit 48 Inside—Mtisic 38 Inside—Radio 24 International News 15 Legitimate 48-51 Literati 62 Music 38-40 New Acts 45 Night Clubs .....41-43 Obituary 52 Outdoors 54-55 'Pictures 2-22 Radio 23-37 Radio Reviews 26 Radio—International 36 Vaudeville 41-43